Gold & Silver get knocked down, but not knocked out

Gold and silver spent another week under pressure, extending the pullback that has frustrated many precious metals investors over the past several weeks.

Gold finished the week just above $4,010 an ounce, while silver fell more sharply to around $56, continuing its recent streak of underperformance.

Even so, both metals stabilized as trading opened Monday, suggesting investors are waiting for the next major catalyst.

At first glance, the weakness may seem surprising. After all, geopolitical tensions remain elevated as conflict between the United States and Iran continues to threaten shipping through the Strait of Hormuz, a vital artery for global oil supplies.

Historically, that type of uncertainty has been bullish for gold.

This time, however, markets have focused more on what higher oil prices could mean for inflation. If energy costs continue climbing, the Federal Reserve may feel compelled to keep interest rates higher for longer—or even consider another rate hike later this year.

Higher rates tend to strengthen the U.S. dollar and increase the opportunity cost of holding non-yielding assets like gold and silver, creating near-term headwinds for precious metals.

Silver's decline has been steeper than gold's, reflecting its dual role as both a precious and an industrial metal.

Concerns that higher borrowing costs could slow manufacturing have weighed on sentiment, even though the longer-term outlook for silver remains supported by growing demand from solar energy, electrification, artificial intelligence infrastructure, and power grid expansion.

Meanwhile, one important long-term trend hasn't changed: central banks continue adding gold to their reserves.

While official-sector buying wasn't enough to offset last week's selling pressure, it remains a powerful source of underlying demand and reinforces gold's role as a strategic monetary asset rather than simply another commodity.

For long-term precious metals investors, periods like this are nothing new. Short-term price swings are often driven by changing expectations for interest rates and investor sentiment.

But the fundamental reasons for owning physical gold and silver—portfolio diversification, protection against currency debasement, and insurance against economic and geopolitical uncertainty—remain firmly in place.