The physical gold and silver markets demonstrated mixed performance this morning, with gold experiencing modest consolidation while silver showed resilience amid shifting market dynamics. Gold spot are trading at at $3,328 per ounce, down $4. The decline comes as geopolitical tensions ease following the Iran-Israel ceasefire agreement, which has reduced safe-haven demand for the precious metal. Silver demonstrated greater relative strength, trading at $36.52 per ounce with a modest gain of $0.25. The market’s performance reflects a fundamental shift in investor sentiment, with participants increasingly focused on Federal Reserve monetary policy rather than geopolitical risk premiums.
Central bank gold purchases continue to provide fundamental support for precious metals markets, with global purchases on track to reach 1,000 metric tons in 2025, marking the fourth consecutive year of substantial buying above historical averages. China’s People’s Bank of China has been particularly active, adding gold to reserves for seven consecutive months through May 2025, bringing total holdings to 73.83 million fine troy ounces valued at $241.99 billion. This persistent accumulation, despite elevated prices, reflects Beijing’s strategic diversification away from dollar-denominated assets and highlights the broader de-dollarization trend among emerging market central banks. The Federal Reserve’s dovish pivot, with core PCE inflation dropping to 2.5% and unemployment at 4.2%, has created a favorable environment for non-yielding assets like precious metals. Meanwhile, precious metals ETFs have attracted significant investor interest, with the SPDR Gold Shares (GLD) receiving $775.9 million in inflows and the iShares Silver Trust (SLV) adding $233.2 million on Monday alone, indicating renewed institutional and retail participation in physical precious metals exposure.
