Key points show a decline in precious metals. On Thursday, spot gold hovered below the $4,000 per ounce mark, while spot silver traded under $60 per ounce. Year-to-date, gold has fallen nearly 8%, with silver plummeting over 20%. Market observers anticipate that the pressure on precious metals prices is likely to persist.

In Barcelona, Spain, on Monday, April 28, 2025, gold and silver bars were displayed in a showroom. Against a backdrop of hawkish central bank policies and persistent inflation concerns, both gold and silver have fallen through key price levels. Industry insiders believe a substantial, sustained rebound for precious metals in the near term is unlikely.

Spot gold fell 0.5% to $3,980.79 per ounce during the session, having already breached the $4,000 level the previous day. U.S. gold futures for the nearest month settled 0.2% lower at $3,986.60. Since the start of the year, gold has declined by 7.7%.

Silver is also under significant downward pressure. On Thursday morning, spot silver dropped 1% to $56.86 per ounce, while July silver futures fell 1.5% to $57.24. Year-to-date, spot silver has depreciated by 20%.

The Precious Metals Bull Run Loses Steam

Gold and silver both embarked on a historic bull market in 2025, surging 66% and 135% respectively for the year and repeatedly setting new records. This rally extended into early 2026 before the market quickly turned volatile. At the end of January, silver futures experienced their largest single-day drop since the 1980s. Following the U.S.-Iran conflict in February, gold's traditional role as a safe-haven asset also came under market scrutiny.

Analysts from Macquarie Group noted in a Wednesday report that all market attention is currently focused on inflation trends and whether central banks like the Federal Reserve will tighten monetary policy to combat rising prices.

"With Middle East tensions appearing to ease and the Fed's stance turning increasingly hawkish, gold's safe-haven appeal has diminished significantly," the report stated. "The market is fully pricing in a Fed rate hike in the fourth quarter and a stronger dollar, with multiple factors combining to pull gold prices lower."

Data from the CME FedWatch Tool shows the market is now betting the Fed could begin raising rates as early as September. In response to energy shocks from the Iran conflict, the European Central Bank and the Bank of Japan have already announced rate hikes this month.

Macquarie pointed out that the first policy meeting chaired by new Fed Chair Kevin Warsh sent a strongly hawkish signal. During his tenure, Fed policy could either weigh on gold prices or potentially provide support.

"The lingering effects of the Middle East conflict are expected to drag on global growth into the third quarter," Macquarie analysts added. "Once the global economy subsequently recovers and central banks worldwide begin a monetary easing cycle, funds are likely to continue flowing out of the precious metals market, making a continued downtrend for gold prices highly probable."

"Investors are currently taking profits and shifting funds heavily into equities... While there is potential for money to flow back into precious metals and push prices higher in the future, reigniting a major investment frenzy would likely require a significant macroeconomic catalyst."

Inflationary Pressures Continue to Weigh on Prices

Macquarie forecasts an average spot gold price of $4,641 per ounce for 2026, representing a 35% year-on-year increase. However, it predicts the price will fall 9.5% to $4,200 in 2027 and weaken further in each year from 2027 to 2030. The firm lowered its year-end spot gold target from $4,400 to $4,300 on Wednesday.

Macquarie stated that last month, a wave of profit-taking weighed on silver prices, and with rising expectations for Fed rate hikes, silver's trajectory is once again being driven by macroeconomic fundamentals.

"Like gold, silver is expected to remain range-bound for the remainder of this year before trending lower in 2027," the report said. "High inflation and the increasing probability of Fed rate hikes will cap silver's upside potential. The higher inflation and U.S. Treasury yields are, the greater the downward pressure on silver. Previously, silver outperformed gold due to tight supply, low inventories, and strong demand, attracting bullish funds. This also implies a higher risk of a correction, as historically, silver's declines tend to be faster and sharper."

The institution predicts silver will rebound to $70 per ounce in the fourth quarter of this year before retreating to $65 by the end of 2027.

Guy Adami, co-founder of Risk Reversal Media and a trader on the financial program "Fast Money," stated on Wednesday's "Closing Bell Overtime" that despite multiple headwinds, gold still holds value as an investment.

"Early in the war, there were unconfirmed but widely circulated rumors that central banks might sell gold," Adami said. "When Micron Technology's market cap surged by $130 billion after-hours, many investors wondered, 'Why hold gold now?'"

"I still believe the inflation problem isn't solved and the Fed will continue raising rates," he added. "While a strong dollar presents significant resistance for gold, market sentiment will eventually shift, and gold will return to favor."

He noted that gold is down about 24% from its peak, making a new bull market in the short term unlikely. "But central banks continue to increase their gold reserves, and gold still presents investment opportunities for the remainder of the year."

The World Gold Council's annual central bank gold reserves survey, released last week, shows central banks still view gold as a core asset for hedging against inflation and geopolitical risks. Nearly 90% of surveyed central banks expect global central bank gold holdings to increase over the next year.

However, in recent weeks, several Wall Street investment banks have lowered their gold price targets.

Analysts from OCBC Strategy said in a Thursday morning report that gold faces heavy selling pressure after falling below $4,000, and the trajectory of gold and silver is once again deeply tied to real yields.

"Even though the long-term fundamental case for gold remains sound, the Fed's recent hawkish signals and rising real interest rates mean a cautious approach is warranted for short-term gold allocations," the report stated. "Only when real yields fall, the outflow from gold ETFs slows, or expectations for Fed tightening cool, will a gold price rebound not be easily met with profit-taking pressure."