Gold and silver will gain as rising debt and inflation reprice bonds and the broader market
(Kitco News) – Rising debt and inflation levels are repricing markets while the constraints on available policy responses favor hard assets, and the recent price pullback and subsequent consolidation of gold and silver hasn’t violated this thesis, according to Paul Wong, managing partner and market strategist at Sprott Inc.In a new in-depth analysis published Monday, Wong pointed out that while gold prices have been rangebound since the mid-March selloff, with futures anemic and ETFs seeing outflows, central banks – including China’s – appear to be treating dips as buying opportunities. “Despite persistent geopolitical and macroeconomic volatility, gold’s price action is consistent with a consolidation phase rather than a breakdown,” he wrote.Meanwhile, equities extended their AI-driven rally in May. “The S&P 500 Index gained 5.15%, led by a surge in semiconductor stocks, which in turn followed strong gains in April,” Wong noted. “In contrast, global bond markets experienced a sharp sell-off. Yields across the curve rose to levels not seen in nearly two decades before stabilizing somewhat toward month-end. The market was reacting to resurgent inflation pressures, initially energy-driven but increasingly broad-based, and rising concerns about fiscal sustainability and debt issuance.”Wong pointed out that annual PCE inflation has held consistently above the Fed’s 2% target over the past five years, and it’s now accelerating.“Bond markets have responded with a synchronized global repricing,” he noted. “Yields have risen across both the front and long ends of the curve, reflecting not only cyclical inflation dynamics but also a structural increase in term premia. Short-end rates have moved higher as markets reprice the path of monetary policy, with U.S. two-year yields exceeding the Fed funds rate, implying renewed risk of monetary policy tightening. At the same time, long-end yields have climbed sharply, with the 30-year yield reaching levels last seen in 2007.”“This simultaneous rise across the curve points to deeper structural concerns about inflation, rising sovereign debt supply, and diminished confidence in fiscal discipline.”Wong said that this repricing of sovereign debt “is the result of post-pandemic fiscal expansion, persistently high debt levels and a transition away from the low-inflation regime that defined the prior decade.”“Elevated deficits, combined with supply-driven inflationary pressures, particularly in energy, have forced markets to reassess the trajectory of interest rates,” he added. “Term premia (the extra return investors demand for holding long-term bonds) are rising as bond buyers seek compensation for inflation uncertainty, increased bond issuance and concerns over long-term debt. As shown in Figure 4, after the GFC (global financial crisis), the term premia declined amid the Fed’s QE and ZIRP policies. Post-COVID, term premia have risen steadily as inflation returned, QE and ZIRP ended, and debt and deficits accelerated.”“Until the cycle of higher inflation, rising debt and deficits ends, term premia may continue to climb.”And even as this has happened, traditional policy tools to respond to it appear to have weakened, with long-term bond yields continuing to rise despite the 2024-2025 Fed rate cuts.“This is different from past cycles, and it suggests markets are increasingly focused on structural risks rather than central bank guidance,” Wong said. “In some cases, developed markets are beginning to look a bit like emerging economies, with rising bond yields alongside weaker currencies, pointing to a decline in the credibility of official policy and a re-rating of sovereign risk. The UK and Japan are recent examples.”Wong said policymakers are increasingly constrained by this dynamic. “If they tighten policy, they may trigger fiscal instability and cause financial stress,” he said. “If they ease policy, they could entrench inflation and weaken currencies. As a result, markets are beginning to anticipate a bias toward official intervention, particularly if bond market stress grows. However, such interventions, whether they involve providing liquidity or controlling yields in some way, effectively monetize debt and can reinforce an inflationary bias.”And as the real and perceived risks in bond market continue to rise, investors are turning to gold as a store of value.“Even if policy adjustment remains orderly, the underlying shift is toward a regime in which real yields are difficult to sustain at positive levels,” Wong wrote. “The rising supply of sovereign debt, coupled with structural shifts in demand, is eroding the effectiveness of bonds as a store of value. As a result, it will become more difficult for financial assets to preserve purchasing power, and the likelihood of further monetary expansion will grow.”“This reinforces gold’s role not as a yield competitor but as a store of value in a system where policy increasingly prioritizes bond market stability (via monetization) over inflation control.”Wong acknowledges that in the near term, gold is facing a cyclical headwind caused by the Hormuz crisis and its broad effects. “The surge in oil prices has increased demand for U.S. dollars among energy-importing economies,” he said. “In some cases, it has forced the liquidation of reserve assets to fund imports. This has temporarily dampened demand from certain central banks and sovereign entities, particularly those most exposed to rising energy costs, even as overall structural buying remains intact.”“Higher energy prices have pushed inflation forecasts higher, prompting the market to shift from expecting rate cuts to the possibility of further tightening,” he added. “This has raised nominal yields, which in the short term can weigh on gold by increasing the opportunity cost of holding non-yielding assets.”But Wong believes these pressures remain cyclical rather than structural, and the broader macro setup for gold remains intact. “That is, a rebuilding of the “debasement trade” as investors shift from fiat currencies like the U.S. dollar into hard assets to protect against the loss of purchasing power caused by inflation and government debt.”He said that policy constraints and rising fiscal dominance will limit the system’s ability to sustain positive real returns. “In this setting, monetary policy becomes constrained as tightening exacerbates growth risks, while easing reinforces inflation,” Wong said. “Fiscal dynamics further limit the scope for real rates to rise meaningfully because higher interest costs strain government budgets.”“Historically, gold’s performance has been closely tied to this imbalance between nominal rates and inflation,” he said. “When real returns on financial assets are compressed or turn negative, gold tends to outperform as a store of value. While rising nominal yields may present short-term headwinds, they are unlikely to remain sustainably positive in real terms, given the structural constraints policymakers face.”And the continued demand for gold from central banks reinforces this view. “Over the past four years, official sector purchases have averaged over 1,000 tonnes annually, driven by diversification, geopolitical considerations and concerns over currency stability,” Wong wrote. “These purchases tend to occur during periods of price weakness, creating a durable floor under the market. While short-term fluctuations in demand may result from liquidity needs, the broader demand trend remains intact.”Also, central banks are increasingly using reserve assets to manage external shocks – and what they choose to keep and sell is very instructive.“Central banks continue to accumulate gold, buying a net 244 tonnes in the first quarter of 2026—higher than the quarterly and longer-term averages,” Wong noted. “At the same time, during the quarter, Turkey liquidated an estimated $14 billion (roughly 85-90%) of its U.S. Treasury holdings. To access liquidity, Turkey also sold 60 tonnes of gold via gold swaps rather than through outright sales.”“This distinction highlights the functional hierarchy within central bank reserve assets,” he said. “Treasuries serve as transactional liquidity instruments, whereas gold is retained as core collateral, even in periods of stress.”Wong said these actions were largely driven by the surging energy and fertilizer costs due to the closure of the Strait of Hormuz. “For import-dependent economies, it has created a need to raise U.S. dollars, often by selling liquid reserve assets such as Treasuries,” he said. “This heightens the potential for more central banks to sell sovereign debt, adds pressure to global bond markets and reinforces gold’s role as a strategic reserve asset.”Meanwhile, structural factors are tightening the physical gold supply. “Mine supply growth remains limited, and steady official sector demand continues to absorb a significant portion of available supply,” he said. “This reduces the amount of freely tradable gold and increases the market’s sensitivity to incremental demand shifts. As a result, while we may see volatility in the near term, the underlying fundamentals resemble historical environments that have been supportive for gold, particularly those characterized by fiscal dominance, monetary expansion, and constrained real returns.”Turning to silver, Wong is bullish on the gray metal’s prospects as well, and believes they also reinforce the case for gold.“The silver market remains in a sustained structural deficit, a condition that has persisted for most of the past several years, according to the Silver Institute’s 2026 World Silver Survey, he noted. “Except for a brief surplus in 2020, the market has consistently undersupplied demand since 2021, resulting in a cumulative deficit of roughly 762 million ounces over the past six years.”“When you include ETF flows, the imbalance is even more pronounced, exceeding 1 billion ounces,” he added. “This points to a prolonged structural shortfall rather than a temporary cyclical imbalance.”Wong said the overall picture is of a silver market that is structurally constrained. “Supply growth is limited, industrial demand is structurally higher, and investment demand is returning,” he said. “Behind cyclical fluctuations in individual segments, the broader supply-demand balance continues to tighten. This suggests a sustained period of constrained availability and asymmetric pricing dynamics lies ahead.”“For gold investors, silver continues to serve as a useful cross-check on the broader narrative of monetary debasement versus hard assets,” Wong concluded. “Gold serves as the monetary anchor and balance sheet hedge. At the same time, silver translates that macro impulse into a market where limited supply flexibility and industrial demand can amplify price moves. In this context, persistent silver deficits, especially with revived investment demand, are a sign that gold’s strength is not an isolated event. Rather, it is part of a broader attempt by investors to reprice scarce real assets amid fiscal dominance and fading trust in fiat systems.”
Platinum, palladium extend losses as Bank of America maintains bullish year-end price outlook
(Kitco News) – While most investors have been focused on gold’s recent breakdown, there has been a broad-based sell-off in the precious metals complex, with platinum group metals feeling the brunt of the sell-off.Both platinum and palladium have fallen to their lowest levels of the year. Although there is room for prices to fall further, one bank is maintaining its bullish year-end outlook for PGMs.“The rally in PGM prices has lost steam since late January, largely tracking moves in gold. Further, ongoing macro headwinds from the conflict in the Middle East add downside risk to demand for industrial metals,” said commodity analysts at Bank of America. “That said, we remain bullish on gold into 4Q, which we expect will draw investors back into the PGM market and add upward pressure to prices.”The comments come as spot platinum currently trades at $1,711 an ounce, down more than 2% on the day. At the same time, palladium last traded at $1,203 an ounce, up 0.5% on the day. Platinum and palladium prices have dropped more than 9% and 6%, respectively, since Friday’s sell-off.However, Bank of America still expects platinum prices to average around $3,000 an ounce by the fourth quarter of 2026 and through the first half of 2027. Palladium prices are forecast to average around $2,200 an ounce in the last three months of the year.PGMs saw significant gains through 2025 as the global trade war and the threat of tariffs on precious metals created significant liquidity issues in the physical market. However, the commodity analysts noted that most of those issues have been resolved, as the tariff threats never materialized.“The decision to impose no tariffs triggered platinum outflows of more than 200koz from the NYMEX warehouses, equivalent to half of the inflows in 2H25. In contrast, palladium also experienced outflows in late January, yet those have now more than reversed as the U.S. Commerce Department issued a final anti-dumping duty of 133% and a countervailing duty of 109% on Russian palladium ounces,” the analysts said.Bank of America also highlighted shifting demand in PGM markets, as platinum is expected to see a small deficit this year while palladium is forecast to see a small surplus.The analysts pointed out that a growing divergence in the automotive sector could create some volatility as demand for electric vehicles in China outpaces that for traditional internal combustion engine vehicles.“This year, EVs are expected to account for around 40% of total light vehicle production, surpassing ICE vehicles for the first time, with ICE share falling to 36%, while hybrids are set to reach 24%. The phase-out of ICE vehicles in China has been pronounced, with production declining to c.14mn units in 2025 from 21mn units in 2020,” the analysts said. “By contrast, the pace of EV adoption remains slower in Europe and the U.S., with the latter stepping back from earlier electrification ambitions.”Along with weakening industrial demand, Bank of America is also keeping an eye on platinum jewelry demand, as that segment of the market is losing momentum.“Jewellery demand is set to weaken, particularly in China, where surplus inventories accumulated during the mid-2025 fabrication surge continue to weigh on the market. While part of this excess stock has already been recycled, retailers remain well-stocked and consumer demand subdued, pointing to a sharp contraction in Chinese fabrication volumes this year,” the analysts said.Although there is uncertainty surrounding demand as the global economy struggles, Bank of America sees a similar impact on supply.The commodity analysts said that the ongoing conflict in the Middle East, which is impacting the energy market and driving inflation, could also affect production, particularly in South Africa.“South Africa is exposed to global oil market disruptions because it is a net oil importer, with limited domestic crude production and declining refining capacity, forcing the country to increasingly rely on imported fuel,” the analysts said. “This exposure is particularly acute for the mining sector, where diesel powers haulage, mechanised operations and backup power generation in a system historically prone to load shedding. Diesel prices have risen sharply since the onset of the war, in addition to Eskom having implemented an 8.76% increase in electricity tariffs from April 2026. These factors are together pushing up mining input costs. Already in Q1, Sibanye-Stillwater reported a 13% YoY increase in unit costs, highlighting cost pressures from ongoing inflation, including higher labour and energy costs.”
China increases gold reserves by 9.95 tonnes in May for 19th straight month of purchases
(Kitco News) – The People’s Bank of China (PBoC) increased its gold reserves by nearly 10 tonnes last month, its 19th consecutive month of bullion purchases, according to the latest government data.The State Administration of Foreign Exchange (SAFE) announced on Sunday that China’s official gold reserves rose by 320,000 troy ounces or 9.95 tonnes in May to a total of 74.96 million troy ounces or 2331.52 tonnes.China’s total foreign exchange reserves rose to $3.4422 trillion at the end of May, increasing by $31.7 billion or 0.93% from April. This is the highest level for China’s FX reserves since November 2015, and they have remained above $3.3 trillion for the past 10 months.SAFE attributed the growth of reserves to a number of factors, including a firmer U.S. Dollar Index and rising global asset prices, adding that China’s sound economic momentum has underpinned the stability of its reserves.Experts have noted that China’s rising foreign exchange reserves are closely linked to the country’s export performance. China’s total foreign trade in the first four months of 2026 rose to $2.39 trillion, an increase of 14.9% year-on-year, with exports rising by 11.3% percent to $1.37 trillion and imports rising 20% percent to $1.01 trillion, according to the latest data from China’s General Administration of Customs.Meanwhile, China’s domestic gold market has shown definite signs of cooling in recent weeks. “Amid heightened market uncertainty, gold ETFs have seen an overall reduction in assets under management, with several funds experiencing significant net outflows,” noted a report from Gelonghui Finance. “As of June 3, 14 gold ETFs recorded combined net outflows exceeding RMB 10 billion [$1.48 billion] over the past month.”“The previously widely accepted investment view of ‘buying on dips amid falling gold prices’ has started to face divergence under current volatile market conditions,” they added.Chinese gold equities listed in Hong Kong also declined sharply in a move characterized as ‘unusual.’“Hong Kong-listed gold stocks broadly declined, with China National Gold International Resources and Jihai Gold down 3.6%, Zijin Mining falling 3.5%, Shandong Gold and Zhaojin Mining dropping nearly 3%, Zijin Gold International declining 2.4%, and Chifeng Gold, Lingbao Gold, China Silver Group, Zhufeng Gold, and Tongguan Gold also following lower,” the report noted.China’s physical gold market has also cooled substantially from the white-hot demand seen at the start of the year when international and domestic gold prices were setting new all-time records on a near-daily basis.The latest numbers from the Shanghai Gold Exchange (SGE) showed that gold withdrawals in May totaled only 63.5 tonnes – the lowest level since February of 2020 during the first wave of the COVID-19 outbreak, and around half of what they were in March of this year.Industry professionals told Gelonghui Finance that “while short-term gold price volatility may persist, the core rationale supporting gold’s strategic allocation value remains intact over the medium to long term.”
Gold could test $4,000 support as inflation risks loom, but long-term bullish outlook remains
(Kitco News) – After Friday’s breakdown, gold prices could have further to fall, but some analysts believe investors should ignore the noise and focus on the bigger picture.In a note published Monday, Fawad Razaqzada, Market Analyst at FOREX.com, highlighted the significant chart damage inflicted on gold on Friday after prices dropped below their 200-day moving average.He added that there is a risk gold prices could test major support at $4,000 an ounce this week if inflation pressures heat up more than expected. He noted that the last time gold prices dropped below their 200-day moving average, in September 2023, the breakdown led to a further 5% decline.“The technical picture has deteriorated noticeably following last week’s sell-off. Gold’s inability to sustain gains above the $4,500 region ultimately left the market vulnerable to a deeper correction, with the break beneath the 200-day moving average accelerating downside momentum,” he said. “The next major area of support is a longer-term ascending trend line near $4,230. Below that, support levels become increasingly sparse until the March lows around $4,100, creating scope for a more pronounced decline if sellers maintain control. Given the current market structure, a move toward the psychologically important $4,000 level can no longer be ruled out.”Fawad’s outlook comes as markets prepare for Wednesday’s Consumer Price Index report, with core inflation expected to rise 2.9% over the last 12 months.“Another firm inflation reading would likely strengthen expectations that rates remain elevated for longer, potentially providing further support for the dollar while weighing on precious metals,” said Razaqzada.Simon-Peter Massabni, Head of Business Development at XS.com, said he has a short-term negative outlook for gold, as the resilient labor market and rising inflation pressures support higher interest rates and a stronger U.S. dollar.“Gold’s future direction will be determined primarily by the trajectory of U.S. monetary policy, unless exceptional geopolitical developments emerge that fundamentally alter the balance of power in global financial markets,” he said. “The most probable scenario is continued market volatility accompanied by a modest bearish bias for gold, as long as U.S. yields remain elevated and expectations for near-term rate cuts continue to fade.”However, Massabni said that despite the near-term downside risks, his bullish medium-term outlook has not changed.“Several supportive factors remain in place, most notably the continued diversification of reserves by central banks and their increasing gold purchases as part of broader efforts to reduce dependence on the U.S. dollar. Furthermore, elevated global debt levels, fiscal challenges facing major economies, and persistent political uncertainty across various regions continue to provide strategic long-term support for the precious metal,” he said.In an exclusive comment to Kitco News, Jeff Sarti, CEO of Morton Wealth, said he is not paying much attention to the short-term trends in gold.“More importantly, we question whether our long-term thesis has changed or should be re-evaluated. The answer to that is ‘no,’” he said. “Long-term trends of fiscal and monetary recklessness, coupled with continued inflationary pressures, remain in force as strongly as ever.”Looking beyond current volatility, Sarti said that lower prices could be a buying opportunity for some investors.“If you are underweight gold, then yes, nibbling a bit here makes sense, but more from a long-term perspective, we are sticking with our positioning,” he said.
Wall Street brimming with bears after gold’s breakdown, Main Street pessimism persists as inflation data takes center stage
(Kitco News) – Gold prices saw another volatile week as persistent Middle East uncertainty offered only limited safe-haven support, while stronger U.S. labor data, rising Treasury yields, and renewed Fed rate-hike concerns drove the yellow metal sharply lower on Friday.Spot gold kicked off the week trading at $4,539.42 per ounce on Sunday evening, and the yellow metal briefly pushed higher as traders reacted to fresh uncertainty around Iran and the Strait of Hormuz. But the rally quickly stalled after reports that Tehran was stepping back from talks, sending oil prices, Treasury yields, and the U.S. dollar higher, with gold ultimately setting its weekly high of $4,545.55 per ounce on Monday before sellers took control.Gold prices attempted to stabilize Tuesday, helped by cautious optimism around a partial Israel-Hezbollah ceasefire, but the recovery faded below $4,550 after April JOLTS data showed job openings jumping to 7.6 million, reinforcing expectations that the Fed would have little reason to ease policy. The pressure continued Wednesday as ADP pointed to steady labor-market conditions, pushing policy-sensitive yields higher and keeping gold on the defensive.The metal found some relief Thursday as Treasury yields and the dollar eased on renewed hopes for a broader regional de-escalation and progress toward reopening the Strait of Hormuz. But Friday’s stronger-than-expected May jobs report reversed the move, with U.S. payrolls rising by 172,000 and rate-hike fears returning in force. Gold broke decisively lower in the wake of the payrolls data, and set its weekly low at $4,311.93 per ounce on Friday afternoon as the selloff accelerated, with the yellow metal seeing only a slight bump off the low heading into the close.The latest Kitco News Weekly Gold Survey showed Wall Street overwhelmingly bearish on gold’s near-term prospects, while Main Street grew more pessimistic after gold’s week of weakness.“Gold looks heavy and the stronger-than-expected US jobs growth and the backing up in yields pushed the yellow metal back below the 200-day moving average (~$4428),” noted Marc Chandler, managing director at Bannockburn Global Forex. “It has not settled below it since Nov 2023. May’s low near $4367 is the next obvious technical level of interest.”“Unchanged,” said Adrian Day, president of Adrian Day Asset Management. “Gold will stay in a trading range until the Iran hostilities end. The conflict boosts the dollar and, by causing the oil price to be high, raises concerns about higher interest rates, both bad for gold.”“Up,” said Rich Checkan, president and COO of Asset Strategies International. “The sell-off in gold is overdone. The real return on investment for holding term deposits at a bank is negative… with interest rates at 3.5% and inflation at 3.8%… and climbing. We are a long way away from the ‘higher’ interest rates necessary to make owning gold less attractive.”Eugenia Mykuliak, Founder & Executive Director of B2PRIME Group, said gold prices are at one of their most interesting points over the past year.“This is the second time the price has tested the 200-day average, and I think it can be the level that often determines the long-term trend,” she said. “However, at first glance, the background can look alarming. The thing is, in May, global gold ETFs lost about $2 billion, and investors continue to take profits and partially withdraw into US bonds.”There is a nuance to the picture, however. “As long as speculative capital is coming out of gold, central banks continue to buy it,” Mykuliak noted. “In April, the world’s central banks returned to net purchases, adding 17 tons to reserves after the March pause. Moreover, gold continues to strengthen its position as a reserve asset and gradually takes away the share of US government bonds in international reserves (especially against investors’ turn to ultra-short bonds).”Mykuliak said she doesn’t believe gold’s current weakness as the beginning of a bear market. “Instead, I would say that we are witnessing a so-called clash: short-term sales by investors vs. long-term strategic demand from states,” she said. “So, if the 200-day average level holds, gold may well receive an impulse for a new wave of growth. Otherwise, the correction will be delayed, but I believe the fundamental history of gold remains strong, as in any case, it’s an undeniable safe-haven.”Kevin Grady, president of Phoenix Futures and Options, told Kitco News that reports of the economy’s death have been greatly exaggerated, and gold has further to fall before it bounces.“The numbers are good, and the revisions were up,” Grady said. “Everybody keeps throwing bad stuff at this, ‘Oh, this is gonna be bad, and that’s gonna be bad, and the economy is not doing well.’“It just doesn’t appear to me to be the case, he said. “The economy looks like it’s in better shape.”Grady said there’s been a lot of speculation about the rate path, but Friday’s nonfarm payrolls report lowers the temperature on that talk. “Raising rates, lowering rates, Warsh, how is he going to deal with this? I don’t think that’s an issue for right now,” he said. “I think there’s still some data out there that he has to look at.”As for gold’s selloff in the wake of the payrolls report, Grady said it’s important not to overreact to the price action in either direction when the market is as thin as it is, but the fresh lows could bring an important segment of buyers back into the market.“Gold stalled up there, and there were no fresh buyers coming in,” he said. “The volume has been anemic. Open interest is very low for gold right now. A lot of people just aren’t buying. I think what’s happening now is that gold is up at these levels, and now they’re saying, ‘Who’s the next buyer?’ The reason gold rallied [at the start of the multi-year rally] was because of the central bank buying. I think we have to look and see what that level is, where the central banks are going to come in and buy, because they weren’t doing it up at those higher levels, and that’s why the market’s testing those lows.”But after Friday morning’s definitive break through the 200-day moving average, Grady believes gold will likely return to test the March 23 low of $4,128 before things turn around.“There’s no reason we couldn’t test that level,” he said. “But the lower volumes and lower open interest are a double-edged sword. Slowly, gold has been eroding a tremendous amount of open interest. And with the market higher up like that, the assumption would be that there’s a lot of longs in the market. The active contract is August, and the August contract is 263,000 contracts, which is very low.”Grady said the market is actually thin on both sides, and he doesn’t see any more conviction in Friday’s selloff than he has in the recent moves higher.“I don’t think that you’re seeing a massive amount of longs,” Grady added. “I think you’re seeing some speculative shorting here. The algos read the data and then they’re pushing this thing lower, and I just don’t think there’s a lot of people right now that are stepping in their way. I don’t think this is a mass liquidation. We’ll see on Monday, but I don’t think you’re seeing a mass liquidation of gold.”He said the larger truth is that people have backed away from the market since March. “The market was up there, and then it stalled,” he said. “Whether you’re talking about the upside or downside in any market, when the market stalls like that, it’s waiting for the next buyer to come in. Who’s the next buyer? No one’s coming in. Open interest is diminishing. A lot of the players are starting to back away.”“I think it was inevitable for us to test these lows.”This week, 15 analysts participated in the Kitco News Gold Survey, with Wall Street flipping from three-quarters bullish to three-quarters bearish after gold’s failure to maintain critical support. Only two experts, or 13%, expected to see gold prices gain ground during the week ahead, while 11 others, or 74% of the total, predicted a price decline. The remaining two analysts, representing 13%, expected consolidation during the week ahead.Meanwhile, 49 votes were cast in Kitco’s online poll, with Main Street investors growing more pessimistic after gold’s latest slide. 23 retail traders, or 47%, looked for gold prices to rise next week, while another 18, or 37%, predicted the yellow metal would lose ground. The remaining eight investors, representing 16% of the total, expected gold prices to trend sideways in the coming week.After a week focused squarely on employment, next week will feature several key inflation metrics that could help market participants firm up their increasingly hawkish interest rate expectations.The economic calendar kicks off on Tuesday morning with the release of Existing Home Sales for May. On Wednesday, traders will be watching the U.S. Consumer Price Index, along with the Bank of Canada’s monetary policy decision, with markets priced in for a hold.Then Thursday morning brings the ECB’s monetary policy decision, with traders seeing good odds of a hike this time, followed by the U.S. Producer Price Index and weekly jobless claims.The week’s economic data wraps up Friday morning with the University of Michigan’s Preliminary Consumer Sentiment Survey for June.John Weyer, director of the commercial hedge division at Walsh Trading, told Kitco News that the higher-than-expected payrolls data, combined with the upward revisions to prior months, constitute a positive trend for U.S. employment.“The one concern on the job numbers, 55,000 were local government hires, he noted. “That’s a pretty large number, and you would think that’s one that won’t be sustained. It’s an interesting wrinkle, but with the revisions, all of a sudden, you’re getting an upward trend here.”“The one thing you might have a concern about, also pointed out by others, was the idea that those who sustained unemployment is growing, those who’ve been off work six months longer is continuing to grow. That’ll give you some concern. But overall, anytime you get something better than expected, it’s always good.”Weyer said the reaction in the gold and silver market has more to do with the surprise than anything else, and he thinks Friday’s selloff was somewhat overdone.“When you see gold down $130, if you’ve been around as long as I have, you think ‘Holy cow! Is the world ending?’ That being said, you can see this making sense,” he said. “There’s an issue going on here with Iran and the Strait of Hormuz. But as long as we don’t have active bombings or attacks, it is being dealt with, it’s a known entity, as opposed to an unknown. Markets can handle good news, they can handle bad news, what they don’t like is uncertainty. We got a little bit of certainty there with the current status [of the ceasefire]. Now if that changes, I would expect the metals to get a lot of this back. I won’t say it’s not a concern, but we’ve learned how to deal with it.”“Now you’re getting some positive sustained economic data,” he added. “It gives you a reason to say, ‘Hey, metals are not the safe haven play.’”Weyer said that interest rate expectations adjusted swiftly in the wake of the payrolls report, and whatever easing bias remained in the market has dissipated.“What I learned being in the trade business, is that I’ll go where the people have money on the line,” he said. “Right now [Treasury futures] are down across the board, which means you’re definitely not expecting any cuts anytime soon. You wonder how far out they’ll go, or how close they’ll come, where they say, ‘We have to consider raising rates is on the table.’ But definitely the idea that cut… It’s hard justifying any rate cut right now. I think it’s just off the table for a while.”As for the price action, Weyer views this as a near-term move, and he expects the market will get much of it back in short order.“There’s a whole lot of longs here, meaning people are buying gold because they were too late,” he said. “You’re going to see it hold for a bit here, but you’re really going to need, I think, more sustained data like we got today” for a sustained trend lower.Alex Kuptsikevich, senior market analyst at FxPro, expects gold prices to decline once again next week.“Gold has once again tested the 200-day moving average, from which the price rebounded last week and in March,” he wrote. “However, the increasingly frequent tests of this long-standing support level signal a further shift in global sentiment towards gold. Fundamentally, gold broke through in January and March, confirming a trend reversal, but we are now merely seeing a shift in strategy to ‘sell the growth.’”“Technically, at the time of writing ($4,380), gold has slipped below the 200-day moving average and is testing last week’s lows and the March support zone, having returned to October’s peak,” Kuptsikevich noted. “We anticipate a further decline in price, with our next area of interest near $4,250, where the 50-week moving average lies. There could be another local shake-out there, comparable to what we have seen over the past two weeks.”Michael Moor, founder of Moor Analytics, expects to see gold prices lose further ground next week.“LOWER unless we take out lower timeframe formation mentioned below,” he wrote. “In a Higher time frame: I cautioned on 8/16/18 the break above $1,183.0 warned of renewed strength. We have seen $4,443.1. This is ON HOLD. We held exhaustion at 56192 with a 56268 high and rolled over $1,526.8. This is ON HOLD. On a medium timeframe basis: The trade below 52554 (+15 tics per/hour) projects this down $220 minimum, $740 (+) maximum—we attained $1,155.4. The trade back below 52036 (+13 per/hour) has brought in $1,103.6 of pressure. The trade back below 51606 (+13 per/hour) has brought in $1,060.6 of pressure. The trade below 48530 (+4 tics per/hour) has brought in $753.0 of pressure. These are ON HOLD. We held exhaustion at 40956 with a 41000 low and have rallied $817.7. The trade above 41814 has brought in $736.3 of strength. The trade above 43642 has brought in $553.5 of strength. These roll into (Q) and are OFF HOLD.”“On a lower timeframe basis: We held exhaustion with a 49177 high and rolled over $554.2,” Moor said. “The break below 48185 projected this down $185 (+)—we attained $455.0. The trade below 47923 projected this down $205 (+)—we attained $428.8. The break below 47420 brought in $378.5 of pressure. On 5/15 we left a medium bearish reversal—we have come off $189.7 from 45532. Decent trade below 44780 (+5 tics per/hour) will warn of pressure, but will stop short of suggesting leaning against this as a short; but if we break below decently and back above decently, look for decent short covering.”At the time of writing, spot gold last traded at $4,327.88 per ounce for a loss of 4.27% on the week and 3.29% on the day.
What’s next for gold after the 200-day moving average breaks?
(Kitco News) – Gold and silver investors aren’t heading into the weekend with much to feel good about.The precious metals market was hit with a wave of selling pressure as prices broke below their 200-day moving average, a critical support level analysts have been watching closely.In the short term, the risks are undeniable. Momentum has clearly shifted against gold, and it would not be surprising to see additional weakness as traders continue to reduce exposure. It’s even too early to start talking about buying the dip.Market expectations that the Federal Reserve will have to take a hawkish stance to fight inflation have pushed bond yields higher and strengthened the U.S. dollar. Higher interest rates raise the opportunity cost of holding a non-yielding asset like gold, while a stronger U.S. dollar creates another headwind for precious metals.Sharp moves like this can feel decisive in the moment, but they don’t necessarily change the bigger picture. Gold has been supported for years by deeper, more persistent forces, and those haven’t gone away.Despite the chart damage, analysts remain confident that this selloff will prove to be a temporary correction. Many have even said that a year from now, they see prices back above $5,000. Several of the forces that have supported gold over the past few years remain firmly in place and, in some cases, they are becoming even stronger.This week, Kitco News attended the Sohn Montreal conference, and there was a clear message for investors: the global economy will remain fractured for the foreseeable future. The era of globalization, built on efficiency and lowest-cost production, is giving way to a world increasingly focused on resilience, security, and strategic resource control. Hudson Bay Capital CEO Sander Gerber explained at the conference that governments and corporations are no longer making decisions based solely on economics; they are prioritizing supply-chain security and geopolitical considerations. That shift creates uncertainty and inflationary pressures that traditional financial models will struggle to capture.Gold has always thrived during periods when uncertainty outweighs predictability.Even if inflation cools in the near term, the long-term outlook points toward structurally higher fiscal spending, elevated deficits, and continued pressure on central banks to accommodate government borrowing. Hard assets like gold and silver remain among the few effective hedges against this scenario.The current selloff is a reminder that bull markets rarely move in a straight line. Gold may face further downside in the weeks ahead as traders position themselves for potentially higher interest rates. However, for investors willing to look beyond the next quarter, the fundamental case for owning gold remains intact.The chart may look broken today. The long-term outlook remains solid.Despite the disappointing start to the month, I hope you have a restful weekend.
Gold price see solid selling pressure as U.S. economy created 172k jobs in May
(Kitco News) – The gold market is seeing surging selling pressure as the U.S. economy created far more jobs than expected, raising expectations that the Federal Reserve has room to raise interest rates to cool inflation.U.S. nonfarm payrolls rose by 172,000 last month, according to the Bureau of Labor Statistics. The monthly figure significantly exceeded consensus forecasts, with economists expecting job gains of around 85,000.At the same time, April’s employment data saw a significant upward revision, with the government reporting that 179,000 jobs were created that month, compared with the initial estimate of 64,000.Meanwhile, the unemployment rate held steady at 4.3%, in line with consensus forecasts.The gold market has struggled for most of the week, as prices have been unable to hold gains above $4,500. The precious metal dropped sharply in its initial reaction to the better-than-expected labor market data. Spot gold last traded at $4,441.03 an ounce, down 0.77% on the day.
Gold demand will drop this year even as supply increases, but average price will still rise 43% in 2026
(Kitco News) – The global gold supply will see modest growth in both mine production and recycling in 2026, even as gold demand is projected to decline as double-digit losses in jewelry and central bank purchases are offset by increased investor appetite for bars and coins, which will replace jewelry as the largest component of demand for the first time, while the annual average gold price is forecast to surge by 43% to a new record high of $4,920, according to the latest analysis and projections from Metals Focus.In their annual Gold Focus 2026, the independent precious metals research consultancy provided detailed forecasts for gold supply, demand and price in 2026, as well as comprehensive historical supply and demand data for 2025.”Gold rallied strongly in 2025, by 44%, its best performance since 1980,” said Matthew Piggott, Director of Gold and Silver at Metals Focus. “Although net central bank purchases were roughly a fifth lower than the year before following three consecutive years of 1,000 tonnes plus gold demand, the 2025 figure remained significantly above pre-2022 levels, with the official sector continuing to play a strategic role in the gold market. A further shift by consumers away from jewellery, in favour of bars and coins, also contributed to last year’s dynamic, with China (+28%) and India (+17%) leading the gains. For the first time in our series, physical investment is set to replace jewellery as the largest component of gold demand.”Piggott acknowledged that gold’s decline following the early year rally – and the range-bound price action that followed – have disappointed many investors, while high oil prices have impacted several key bar and coin markets. “That said, the drivers from 2025 remain intact: ongoing US policy uncertainty, persistent concerns about the dollar’s long-term outlook, elevated geopolitical risks, and stretched equity valuations,” he said. “Together, these factors reinforce gold’s role as a safe haven and portfolio diversifier, and we expect further all-time records to be achieved later this year.”In their detailed analysis, Metals Focus analysts noted that global gold mine production reached another high in 2025, rising 2.0% year-on-year to 3,817 tonnes, driven by new mines, expansions, and higher artisanal and small-scale gold mining. “Global all-in sustaining costs rose by 12% y/y to $1,552/oz, underpinned by higher royalties and inflationary cost pressures,” they wrote. “In 2026, gold mine supply is forecast to increase again, by 2.4% y/y to 3,907t, as output strengthens in all regions except for Oceania and Europe.”Meanwhile, despite gold prices setting record highs, global recycling rose by just 2.8% year-over-year in 2025, though it was enough to set a 13-year high of 1,404 tonnes. “This performance was driven by gains in Europe, as well as modest increases in most other regions, all of which offset notable weakness in South Asia,” the report said. “Scrap supply is forecast to rise by 5.1% y/y in 2026, as low near market stocks and the desire to retain gold as a safe haven limit gains despite sharply higher prices.”Central bank demand cooled somewhat compared to recent years, with net official sector purchases falling by 22% year-over-year to a four-year low of 848 tonnes. “Buying was spread geographically, as elevated US policy uncertainty encouraged further diversification,” the analysts said. “Sales were concentrated among a small number of countries, largely reflecting portfolio rebalancing after the price rally. Despite headwinds from the energy shock, net purchases are expected to remain historically high in 2026 as diversification-led drivers persist.”On the investment front, exchange-traded product (ETP) holdings increased by 803 tonnes in 2025 – the highest annual inflows since 2020 – with gains spread across regions. “Tariff uncertainty, rising US debt, concerns over Federal Reserve independence, and ongoing geopolitical turmoil all enhanced gold’s investment appeal,” they noted. “Physical investment rose 16% to a 12-year high, as strong price gains fuelled retail demand.”On the industrial side, Metals Focus said electronics demand was essentially unchanged in 2025, gains from the burgeoning AI buildout offset by weakening demand for consumer electronics. “Decorative and Other Industrial fabrication contracted by 4.9% in 2025, to its lowest level since a pandemic-affected 2020,” the analysts added.And global jewelry fabrication declined by 19% in 2025 to a five-year low of 1,646 tonnes. “Most countries saw losses, as high prices dominated the trend, prompting light-weighting, carat shifts and some substitution from gold to platinum and plated or gold-filled jewellery,” they wrote. “In 2026, the decline is expected to continue, by a further 11%, leaving fabrication only slightly above a pandemic-impacted 2020.”And while 2026 started on a positive note with a series of fresh all-time highs, the near-unprecedented momentum didn’t last. “Changing expectations on US policy rates and the fact that the market had become overbought fuelled a correction soon after,” the report noted. “The war in Iran has also added pressure to the gold price, as concerns about inflation have further reduced the scope for US rate cuts and boosted sovereign yields and steepened curves.”“In spite of these headwinds, we are confident that, once the Iran war dust settles, gold will resume its bull run,” the analysts wrote. “This is premised on our expectation that the worst will be avoided and that, on balance, policymakers will tolerate elevated inflation, rather than sacrifice growth.”“Crucially, all other factors that underpinned gold last year are likely to remain in place over the rest of 2026 and beyond.”
China’s gold market is cooling, multiple metrics show
(Kitco News) – China’s gold market, which along with central bank demand has been one of the central pillars of the multi-year gold rally, has shown definite signs of cooling in recent weeks. “Amid heightened market uncertainty, gold ETFs have seen an overall reduction in assets under management, with several funds experiencing significant net outflows,” noted a report from Gelonghui Finance. “As of June 3, 14 gold ETFs recorded combined net outflows exceeding RMB 10 billion [$1.48 billion] over the past month.”“The previously widely accepted investment view of ‘buying on dips amid falling gold prices’ has started to face divergence under current volatile market conditions,” they added.Chinese gold equities listed in Hong Kong also declined sharply in a move characterized as ‘unusual.’“Hong Kong-listed gold stocks broadly declined, with China National Gold International Resources and Jihai Gold down 3.6%, Zijin Mining falling 3.5%, Shandong Gold and Zhaojin Mining dropping nearly 3%, Zijin Gold International declining 2.4%, and Chifeng Gold, Lingbao Gold, China Silver Group, Zhufeng Gold, and Tongguan Gold also following lower,” the report noted.China’s physical gold market has also cooled substantially from the white-hot demand seen at the start of the year when international and domestic gold prices were setting new all-time records on a near-daily basis.The latest numbers from the Shanghai Gold Exchange (SGE) showed that gold withdrawals in May totaled only 63.5 tonnes – the lowest level since February of 2020 during the first wave of the COVID-19 outbreak, and around half of what they were in March of this year.Industry professionals told Gelonghui Finance that “while short-term gold price volatility may persist, the core rationale supporting gold’s strategic allocation value remains intact over the medium to long term.”
Gold and silver gain with risk assets as crude retreats on deal hopes
(Kitco NewsWire) – Spot gold and silver prices are higher in late-afternoon U.S. trading Thursday, as weaker crude oil, softer Treasury yields and a lower U.S. dollar supported precious metals ahead of Friday’s May employment report. At the time of writing, spot gold was trading near $4,477.70 an ounce, up 0.97%, while spot silver was trading at $73.955, up 1.66% on the session.U.S. jobless claims rose by 13,000 to 225,000 in the week ended May 30, while continuing claims fell by 8,000 to 1.777 million for the week ended May 23. The claims data added to the case that the labor market is loosening at the margin, but not enough to settle the Fed debate before Friday’s payrolls print.The Strait of Hormuz remains the main geopolitical channel into gold, oil, rates and equity risk. The throttled traffic has kept a persistent risk premium in crude despite Brent futures staying below $100 a barrel. The current U.S.-Iran setup is being traded as a managed-disruption story rather than a full supply-shock story: oil retreated as traders bet on a possible U.S.-Iran deal, Treasury yields eased with inflation pressure lower, equities outside AI-linked tech caught a bid and gold benefited more from the rate-cut channel than from outright safe-haven demand.The pre-open split in U.S. equity futures resolved into a rotation trade by the close. The Dow Jones Industrial Average rose 874.86 points, or 1.7%, to a record 51,561.93, the S&P 500 added 30.63 points, or 0.4%, to 7,584.31 and the Nasdaq Composite slipped 23.02 points, or 0.1%, to 26,830.96. The Russell 2000 gained 41.81 points, or 1.4%, to 2,935.33 as lower borrowing costs supported smaller companies.The key outside markets see Nymex crude oil prices lower and trading around $93.02 a barrel, while Brent crude was near $95.22. The U.S. dollar index is softer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.5% area.Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,530.00 to $4,550.00 resistance zone, with a sustained move targeting the 50-day moving average at $4,628.99 and then the $4,660.00 to $4,680.00 area. Bears’ next near-term downside price objective is a break below $4,425.00, with deeper downside targets at $4,370.00 and then $4,350.00. First resistance is seen at $4,530.00 and then at $4,550.00. First support is seen at $4,425.00 and then at $4,370.00.Spot silver bulls’ next upside price objective is to drive prices back above the 50-day moving average at $76.15, with a move above that zone targeting $78.00 and then $79.00. The next downside price objective for the bears is a break below the $71.00 to $72.00 support zone, with deeper downside targets at $66.00 and then $65.00. First resistance is seen at $76.15 and then at $78.00. Next support is seen at $72.00 and then at $71.00.