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:
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.
