GLOBAL BULLION TRACKER — METALS BRIEF

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Gold is trading near $4,600 an ounce Thursday morning after a sharp run higher followed by Wednesday’s inflation-driven pullback. The metal briefly pushed above $4,700 earlier this week before reversing as investors reassessed the outlook for interest rates.

Silver followed a similar pattern. It tested $70 an ounce twice but failed to hold above that level, leaving $70 as the clearest near-term resistance point.

The week’s story has been straightforward: gold and silver surged on falling long-term yields, a weaker dollar and continued fiscal concerns, but hotter inflation reminded investors that the Federal Reserve still has little room to declare victory.

Wednesday’s Personal Consumption Expenditures Price Index, or PCE, showed that inflation remains stubbornly high.

PCE is the Federal Reserve’s preferred inflation measure. It tracks changes in the prices consumers pay across a broad range of goods and services and adjusts for changes in consumer purchasing behavior, making it an important input into Fed interest-rate decisions.

July PCE rose 0.2% from June and 3.7% from a year earlier, slightly hotter than expected. Core PCE, which excludes food and energy, rose 3.3% year over year.

Gold had tested $4,700 earlier Wednesday but reversed sharply after the report as traders reconsidered the likelihood of additional Fed tightening.

The challenge for policymakers is becoming clearer: inflation remains elevated even as economic growth slows.

The second estimate of second-quarter GDP confirmed that the U.S. economy grew at an annualized rate of just 1.5%.

At the same time, inflation measures embedded in the GDP report were revised higher.

That combination — slower economic growth alongside persistent inflation — creates a difficult environment for the Fed. Raising rates further risks weakening the economy, while easing too soon could allow inflation to remain entrenched.

For gold, that policy tension can be supportive over the longer term even when individual inflation reports cause short-term selling.

Silver has now challenged $70 an ounce twice without sustaining a breakout.

That closes the loop on the level we highlighted in Monday’s brief as silver’s immediate “line in the sand.”

The failed breakout suggests momentum has cooled, but it does not erase the underlying move. Silver remains sharply higher for August, and the market continues to benefit from strong investment demand and a persistent supply deficit.

Silver is expected to record its sixth consecutive annual market deficit this year despite mine production reaching its highest level in roughly a decade.

For now, $70 remains the level to watch.

The Treasury’s expanded long-bond buybacks helped push longer-term yields lower and weaken the dollar, creating a more supportive backdrop for gold and silver.

Treasury increased planned purchases of older long-term bonds to at least $4 billion per operation, an effort intended to improve liquidity in parts of the Treasury market.

The development has also focused more attention on the broader U.S. fiscal picture. Federal debt has moved above $40 trillion, while investors continue to debate whether growing Treasury issuance and rising interest costs will keep long-term borrowing costs elevated.

That backdrop remains an important structural support for gold.

The United States is intensifying financial pressure on Iran through a broader sanctions campaign aimed at restricting Iran’s access to foreign currency and international financial networks.

The measures could extend beyond Iran itself to companies and countries that continue facilitating trade with Tehran.

For precious metals, the significance is broader than sanctions alone. Escalation could affect oil prices, inflation expectations and demand for safe-haven assets.

Interestingly, metals weakened briefly when the sanctions story emerged earlier this week but recovered much of those losses during the same trading session — another indication that underlying demand remains relatively firm.

Trade policy is also becoming increasingly important to the metals outlook.

The administration continues to pursue expanded tariffs while simultaneously attempting to reduce federal spending and borrowing costs.

Those policies can pull markets in different directions.

Lower spending could improve the longer-term fiscal picture. But broader tariffs can increase the cost of imported goods and add to inflation pressures, potentially forcing the Fed to keep rates higher for longer.

That tension matters directly for Treasury yields, the dollar and precious metals.

Mortgage applications fell 1.0% last week, according to the Mortgage Bankers Association.

The report is not normally a major precious-metals catalyst, but it provides another useful indication that high borrowing costs continue to pressure rate-sensitive parts of the economy.

Housing is therefore adding to the same mixed picture seen elsewhere: inflation remains elevated while portions of the economy are clearly feeling the effects of high rates.

India’s gold market is showing clearer signs of improvement than we discussed earlier this week.

July gold imports rebounded to an estimated 40–45 tonnes from just 20 tonnes in June, while the value of imports more than doubled to approximately $4.16 billion from $1.97 billion.

The World Gold Council also reports that jewelers and manufacturers are replenishing inventories ahead of the important festive season.

India insight: This is stronger evidence that the physical market is beginning to recover. Restocking normally takes place ahead of peak consumer demand, making the October-November festive period an important next test for Indian gold consumption.

Central-bank buying rebounded sharply in Q2. Official institutions added a net 289 tonnes of gold, up 62% from a year earlier and a record for a second quarter. That was more than five times the revised Q1 total of 57 tonnes, reinforcing the longer-term trend of central banks diversifying reserves into gold.

This remains one of the most important structural supports underneath the gold market. Official-sector demand is less sensitive to short-term price moves than many investment flows, providing another source of demand even when traders react to inflation data or changing interest-rate expectations.

The Federal Reserve Bank of Kansas City’s annual Jackson Hole Economic Policy Symposium begins today and runs through Saturday.

The main event for markets will be Fed Chair Kevin Warsh’s first Jackson Hole keynote on Friday.

Because Warsh is still establishing his communication style as chair, markets do not yet have a well-developed framework for interpreting his language. That increases the potential for volatility around the speech.

Investors will be listening closely for his views on whether inflation remains persistent enough to justify additional tightening, how the Fed views slowing economic growth, the impact of elevated long-term Treasury yields, and how the Fed intends to balance inflation risks against growing signs of economic strain.

Gold and silver could react quickly if his comments materially change expectations for the next Fed meeting.

For gold, $4,700 remains the immediate upside test. The ability to hold around the mid-$4,500s to $4,600 area will help determine whether Wednesday’s decline was simply consolidation following a powerful rally.

For silver, $70 remains the line in the sand after two unsuccessful breakout attempts.

Beyond price levels, Friday’s Jackson Hole speech is now the most important near-term catalyst.

This week demonstrated both sides of the current precious-metals market.

Treasury bond buybacks, a weaker dollar, fiscal concerns and geopolitical uncertainty helped drive gold toward $4,700. Wednesday’s PCE inflation report then reminded investors that inflation remains too high for the Fed to relax.

At the same time, several longer-term supports remain firmly in place: central-bank gold buying rebounded to a record second-quarter level, India’s physical market is recovering, silver remains in a structural supply deficit, and U.S. fiscal concerns continue to grow.

The next major signal comes from Jackson Hole.

A more hawkish Warsh could lift yields and the dollar and pressure metals. A message focused more heavily on slowing growth, financial stability or the risks associated with high long-term rates could quickly put $4,700 gold and $70 silver back in play.

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For informational purposes only. Not investment advice.

Sources: Reuters, Financial Times, U.S. Bureau of Economic Analysis, U.S. Treasury Department, Federal Reserve Bank of Kansas City, Mortgage Bankers Association, World Gold Council, Silver Institute, Global Bullion Tracker.