If you fancy yourself a fan of gold or silver, you’re feeling a bit more cheerful about the metal than this spring.
Gold has been rising all month, up some 14% since July 31 to about $4,380 per troy ounce at the Aug. 21 close. Silver is up nearly 20% to $69.50 an ounce.
Related: After the bubble: Why UBS is still a gold-and-silver fan
Your cheer, however, has come after a lot of pain — more than six months, in fact.
Precious metals prices surged upward through 2025 until an abrupt halt at the end of January. Gold peaked at $5,586 an ounce. Silver topped out at $121.785 an ounce.
Both were seriously overbought levels.
The peak came because futures exchanges tightened the rules for trading, something they will do if they believe trading has gotten out of hand. The rule changes effectively meant the cash required to trade in the gold and silver markets went up substantially.
More important: On Jan. 29, President Donald Trump nominated Kevin Warsh to be the new chairman of the Federal Reserve Board.
Gold and silver traders saw immediately that an inflation hawk would be in charge of running the Central Bank and might be more serious about cutting down domestic inflation, says former JP Morgan economist Anthony Chan, and started to unload their positions.
But then came start of the war in the Middle East and, with the war, sharply higher oil prices and, of course, sharply higher gasoline and diesel prices.
By the end of June, gold had tumbled about 28.5%. Silver fell 58% from its $121.79 peak to its bottom in mid-July.
The war, which started on Feb. 28, caused oil prices and inflation to jump sharply. Warsh’s appointment — and Wall Street’s expectation the Fed would raise rates in 2026 — pulled interest rates higher, which was terrible for metals.
Stefan Wermuth / Bloomberg / Getty Images
A break in the summer
But the tide turned in the late spring and early summer on three points:
- Crude oil prices peaked in the late spring.
- The war itself lapsed into what’s basically been a stalemate, despite continuing drone and missile attacks from the United States and Iran. (A note: When there is no shelling, oil and fuel prices fall.)
- Warsh and the Fed have not yet raised interest rates.
The three combined to give gold and silver new life and gains for related exchange-traded funds. Since bottoming on July 15, the SPDR Gold Shares exchange-traded fund (GLD) has jumped 16%; the iShares Silver Trust (SLV) is up 24%.
Citigroup analysts think gold could close above $5,000 this year and hit $6,000 in 2027.
A new catalyst came this month when Treasury Secretary Scott Bessent said the United States was going to buy back long-dated Treasury bonds in a bid to knock down Treasury yields.
Partly the move is to deal with rates that had been rising since the Persian Gulf war erupted because bond investors understood that the war costs were going to prove far greater than anyone expected and impossible to predict.
Another reason is to bring the U.S. dollar more into balance with the Japanese yen. That currency has been sliding because its government deficits are larger than those in the United States: about 200% of gross domestic product.
And some decided they preferred hard assets like gold, silver and other metals instead of buying Treasury securities that could fall in value if interest rates continue to rise.
Bessent’s campaign worked for one day, but yields jumped back up on Aug. 20 and Aug. 21 as a number of analysts said the campaign wouldn’t work.
The 10-year Treasury yield was at 4.736% on Aug. 21, up nearly 13.5% on the year and nearly 20% since the war started on Feb. 28. The 30-year Treasury yield hit 5.275% the same day, up nearly 9% in 2026 and up 14.3% since the war began.
More Gold & Silver:
- Robert Kiyosaki has a bold call on gold and silver
- Peter Schiff sees something big in gold and silver
- BofA sees lost year taking shape for gold
The new Fed boss will have his say
The situation is fluid and confusing. And we haven’t talked about the Federal Reserve and Kevin Warsh.
Warsh has been adamant the Fed will deliver on a pledge to deliver price stability. But he has not offered many details because he’s also trying to refocus the Fed.
Investors are hoping for clarity on Friday when Warsh gives the keynote address at the Jackson Hole Economic Policy Symposium in Wyoming. The speech is scheduled for 10 a.m. ET.
Traders and money managers around the world will be listening carefully.
Are gold and silver right for investors?
You can invest in both if you think deficits in the United States and elsewhere are out of control and dangerous.
And the easiest way to do it is to buy the SPDR gold shares exchange-traded fund (GLD) or the iShares Silver Trust ETF (SLV). They’re easy to buy and sell. And, if you think both are headed higher, enjoy the ride.
Since both buy gold and silver directly, your investment is subject to market forces as I noted above. It’s not an exaggeration to say the post-January slump was violent.
But keep this one fact in mind: The bottom for each was not close to lows in 2023 and 2024.
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