One kilogram and a five hundred gram gold bars next to one kilogram silver bars at The Vaults Group gold dealers arranged in Barcelona, Spain, on Monday, April 28, 2025.
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Gold and silver prices are holding below key thresholds as hawkish central banks and inflation fears weigh on the metals — and market watchers see little chance of a meaningful rebound in the near term.
Spot gold was last seen 0.5% lower at around 4:00 a.m. ET on Thursday, trading at around $3,980.79 an ounce after falling below the $4,000 mark in the previous session. Front-month U.S. gold futures were down by 0.2% to settle at $3986.60. Year-to-date, gold is now down by 7.7%.
Spot gold
Silver prices are also coming under pressure. Spot silver was 1% lower at $56.86 per ounce on Thursday morning, while silver futures for July delivery were down by 1.5% at $57.24. Spot silver has lost 20% of its value since the beginning of the year.
Spot silver
Precious metals rally stalls
Both gold and silver enjoyed record-smashing rallies in 2025, surging 66% and 135% respectively over the course of the year.
While the rally continued into early 2026, trade soon turned volatile. Silver futures suffered their biggest single-day blow since the 1980s at the end of January and gold’s safe haven status has been called into question after the outbreak of the U.S.-Iran war in February.
In a note on Wednesday, strategists at Macquarie said all eyes were now on the trajectory of inflation and whether central banks — particularly the Federal Reserve — will tighten policy to keep prices under control.
“The apparent end to the conflict in the Middle East, combined with a more hawkish Fed, has caused prices to retreat as gold’s safe haven appeal fades together with the prospect of higher interest rates and a stronger USD, with a Fed rate hike in Q4 now fully priced in,” they said.
Markets are currently pricing in a Fed rate hike by September, according to the CME’s FedWatch tool. Both the European Central Bank and the Bank of Japan raised interest rates this month in response to the Iran war energy shock.
Macquarie’s said that new Fed Chair Kevin Warsh’s first meeting had taken a “hawkish tone” and that, under his leadership, the central bank has “potential to derail or support prices” in the gold market.
“Post the fallout from the Middle East, which we expect to weigh on global growth into Q3, the eventual upturn in global growth and monetary policy easing cycle should see gold prices trend lower as more investor money transitions out of precious metals,” they said.
“Investors have been taking profit and pivoting towards equities … This creates space for investors to re-enter the precious space, thereby pushing prices back up, but it would likely require a major macro event to reignite interest.”
Inflation weighs on prices
Macquarie is forecasting an average gold spot price of $4,641 per ounce for 2026, a 35% year-on-year gain, but it expects prices to fall 9.5% to $4,200 in 2027 and decline every year until 2030. It trimmed its year-end forecast for spot gold to $4,300 on Wednesday from a previous outlook of $4,400.
Profit taking put pressure on silver prices last month, Macquarie said, adding that “price action is back to being macro driven” amid rising expectations of a Fed rate hike.
“As with gold, we expect prices to remain range bound for the remainder of this year before gradually trending lower in 2027, with tensions caused by inflation and the probability of a Fed hike to limit further upside,” they said.
“The higher inflation and bond yields move, the greater the downwards pressure. For silver in particular, bullish investor sentiment fueled by tighter supply, low inventories and strong demand has caused prices to outperform gold, making it more vulnerable to a retracement. And historically silver retraces quickly.”
Macquarie expects silver to trade at $70 per ounce in the final quarter of this year, before falling to $65 an ounce by the end of 2027.
Guy Adami, co-founder or RiskReversal Media and a “Fast Money” trader, told CNBC’s “Closing Bell Overtime” on Wednesday that gold is “still in play” despite facing a series of headwinds.
“There was this talk [of] central banks potentially selling [gold] at the beginning of the war, I have no validation or verification of that, but that was out there, and in a world where Micron adds $130 billion of market cap in the after hours, people are saying, ‘why am I messing around with gold right now?'” he said.
“I’m still of the belief that inflation is a problem. I think interest rates go higher. I understand the headwinds that the dollar provides, but at some point I think it’s all going to sort of flip, and gold is going to be back in favor,” Adami added.
Noting that gold is now down around 24% from its all-time high, he said “it makes no sense” to argue for a fresh gold rally.
“But I’m still of the belief that central banks will continue to add to their positions, and gold is going to still be in play for the remainder of the year,” he told CNBC.
The World Gold Council’s annual Central Bank Gold Reserves survey, published last week, found that central banks continue to view gold as a key hedge against inflation and geopolitical risks. Almost 90% of respondents said they expect global central bank gold reserves to increase over the next year.
However, a number of Wall Street analysts have slashed their target prices for gold in recent weeks.
Strategists at OCBC said in a note on Thursday morning that heavy pressure remains on gold prices after the break below $4,000, with price action increasingly reconnecting with real yields.
“Even as the medium-term constructive story holds, the recent hawkish Fed rhetoric and higher real rate environment argue for a more cautious stance on gold in the near term,” they said. “Until real yields ease or ETF liquidation slows or hawkish Fed rhetoric unwinds more, rallies may remain vulnerable to fading.”
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