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Gold and silver are ending the June quarter on a sober note, breaking a five-quarter winning streak. Gold has lost nearly 12 percent this quarter, its steepest fall since December 2016, while silver has slipped 17.6 percent, its sharpest drop since June 2022.
The damage looks even bigger when you measure from their record highs. Gold has fallen 24 percent from its all-time peak of $5,417 an ounce, and silver has dropped around 47 percent from its January high of $117 an ounce. The fall is steep, but so was the climb that came before it. Gold had risen 65 percent in 2025 and 28 percent in 2024 while silver had surged 148 percent in 2025 on top of a 22 percent gain in 2024.
What makes this fall more interesting is that several forces are hitting the market at the same time. The biggest is the shifting US interest rate outlook. Markets now expect the Federal Reserve to stay restrictive for longer, and some investors are even pricing in additional hikes this year as rising oil prices keep inflation elevated. New Fed Chair Kevin Warsh has reaffirmed the central bank's commitment to fighting inflation, and the Fed has actually raised its 2026 inflation projections.
Higher rates make yield-bearing assets like bonds more attractive than gold, which pays nothing. And since gold and silver are priced globally in dollars, a strong dollar makes both metals costlier for buyers using other currencies, which hurts demand.
Easing geopolitical tension has added to the slide, too. The safe-haven flows that built up around the US-Iran standoff have started reversing now, sending money back into equities and other risk assets.
Traders have also been booking profits on positions that had grown crowded and, technically speaking, overbought. Once prices started falling, that triggered a domino effect, with more traders cutting positions and pushing prices lower still.
Silver has fallen faster than gold because it plays two roles at once, both a precious metal and an industrial one, which makes it more volatile and more exposed to swings in manufacturing demand.
What's surprising is gold has corrected despite record buying by central banks. Data show central banks bought a net 244 tonnes in the first quarter, the strongest start to a year in some time, and resumed purchases in April after a brief pause in March. A World Gold Council survey found that 89 percent of reserve managers expect global central bank gold holdings to rise over the next year, suggesting the structural demand that fuelled gold's rally is still intact.
ETF investors, though, have been quicker to move, cutting their positions in May and June after strong buying in April.
Looking ahead, most brokerages, including Goldman Sachs, JPMorgan, Morgan Stanley and Bank of America, have trimmed or pushed back their near-term price targets, but none have turned structurally bearish. Bank of America has kept its long-term $6,000 gold target intact, simply expecting it to take longer to get there, while BMO Capital Markets still sees gold reaching $5,000 by the first quarter of next year despite trimming this year's average forecast.
The common thread across most research desks is that the long-term case for gold, built on central bank diversification away from the dollar, high government debt and persistent inflation risk, hasn't broken, even if the next few months stay volatile.
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