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.
A break in the summer
But the tide turned in the late spring and early summer on three points:
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Crude oil prices peaked in the late spring.
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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.)
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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.
Facts Only
* Gold rose approximately 14% since July 31 to about $4,380 per troy ounce at the August 21 close.
* Silver increased nearly 20% to $69.50 an ounce during the month.
* Precious metal prices surged through 2025 until a halt in January.
* Gold peaked at $5,586 an ounce.
* Silver peaked at $121.785 an ounce.
* Futures exchanges tightened rules for trading gold and silver, increasing cash requirements.
* Donald Trump nominated Kevin Warsh to be the new chairman of the Federal Reserve Board on January 29.
* Some traders unloaded positions following the nomination, based on expectations of inflation-focused policy from Warsh.
* Gold tumbled about 28.5% by the end of June.
* Silver fell 58% from its peak to its bottom in mid-July.
* SPDR Gold Shares (GLD) jumped 16% since bottoming on July 15.
* iShares Silver Trust (SLV) is up 24%.
* Treasury Secretary Scott Bessent stated the United States would buy back long-dated Treasury bonds to reduce yields.
Executive Summary
Full Take
The narrative of precious metals—driven by inflation hedging and monetary policy expectations—reveals a cycle where speculative peaks are often preceded by regulatory constraints or significant political shifts, which then create sharp volatility once actual geopolitical events intervene. The initial surge was predicated on an expectation that the Federal Reserve’s actions would be deflationary, supported by the nomination of an inflation hawk to the Fed, creating a temporary bullish environment for assets perceived as stable stores of value. This environment created an unsustainable peak, suggesting that market sentiment in such situations often overshoots rational equilibrium before external shocks correct the valuation. The subsequent crash was catalyzed not purely by the war itself, but by the interplay between rising energy costs and the fact that interest rate hikes were delayed, allowing yields to exert downward pressure on commodity valuations when relative stability returned through geopolitical stagnation. The final movement, supported by the Treasury's intervention aimed at lowering yields, suggests that monetary policy signals remain a dominant anchor for metal pricing, even amidst conflict. The persistent pattern is that market exuberance tied to specific macroeconomic narratives erodes rapidly when tangible, real-world variables shift the risk calculus.
Bridge Questions: If geopolitical instability persists without clear escalation, what is the appropriate mechanism for integrating risk premiums into long-term commodity forecasts? How do sustained central bank signaling regarding interest rates influence physical versus financial backing for these assets in a prolonged high-inflation environment? What predictive indicators signal when market correction is simply a necessary adjustment or a genuine structural break?
Sentinel — Human
The text functions as a synthesis of complex market events, using specific data and named actors to construct an argument about the volatility and recovery drivers affecting gold and silver prices.