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The rapid growth that has been going on in the Bullion Market for the last two years has now come to a complete halt. There are only a few days left for the end of the current June 2026 quarter, and going by the movement of precious metals, this quarter is going to prove to be a huge blow for gold and silver investors.
Both gold and silver are going to enter the negative zone in this quarter, with which their growing trend for the last five consecutive quarters will be broken. The condition of gold is so bad that it is heading towards its biggest quarterly decline in the last 10 years, while the shine of silver is going to fade the most in 4 years.
How much has gold and silver faded? (Math of Quarters and Record Highs)
After delivering record profits in the last two years, the fall in gold and silver prices in the June quarter has surprised even market analysts:
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Fall in Gold: Gold prices have fallen by 12% so far in this current quarter. This is going to be the biggest quarterly decline in gold since December 2016. When compared to its all-time record high, gold is down 24% from its high of $5,417 per ounce (28.35 grams).
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Crash in Silver: Silver has slipped 17.6% this quarter, its sharpest fall since June 2022. At the same time, silver has fallen by almost 47% (close to half) from the historical record high of $117 per ounce made on January 28.
Why did there come such a big recession after the boom? Experts gave 3 main reasons
According to Deveya Gaglani, Senior Research Analyst (Commodities), Axis Direct, and other commodity experts, global economic policies and diplomatic changes are responsible for this continuous decline in gold and silver:
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Strength of the US Dollar and Bond Yields: The US Dollar Index has recently reached its highest level in a year. Along with this, US Treasury Bond Yield also remains at high level. Since there is no interest or fixed return on gold and silver, in the era of strong dollar, investors are leaving precious metals and investing money in options like dollar and treasury.
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Strict stance of the US Federal Reserve (US Fed): Kevin Wersh, the new Chairman of the US Central Bank (Fed), may have kept the interest rates stable for the time being in his recent monetary policy meeting, but has given clear indications of increasing the rates once again this year. This environment of high interest rates for a long time is proving to be the biggest enemy for gold.
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Inflation Concern: Chicago Federal Reserve Bank President Austan Goolsbee has recently given a statement that the US economy has been struggling with the problem of inflation much higher than the target for a long time and the recent trends are not in the right direction. Due to this threat of rising inflation, hopes of cutting interest rates have been dashed.
America-Iran peace agreement also did not benefit
Initially, crude oil prices were on fire after the rising geo-political tension between America and Iran and the war in Western Asia, which supported gold as a safe investment. But the surprising thing is that even when a peace agreement was signed between the two countries and the prices of crude oil slipped, the pressure on gold and silver continued. The reason for this was that the tough stance of the Fed and the strength of the dollar completely dulled the positive impact of the peace agreement.
Expert Comment (Deveya Gaglani):
“Despite the easing of geopolitical tensions, the bullion market remains under pressure due to the dovish stance of the US Fed and the sharp rise in the dollar index. As long as the dollar index remains above the psychological level of $100, there is little hope of a major recovery in gold and silver prices and bearish pressure may dominate the market.”
What are investors’ eyes on now?
To understand the future of gold and silver and the next step of the Federal Reserve, global investors are now eyeing the US Personal Consumption Expenditure (PCE) Price Index data to be released on Thursday. The market fears that the PCE index figures may rise. If this happens, the US Fed may further tighten interest rates in the coming time, due to which gold and silver prices may see a further decline in the coming days.