We have geopolitics again forming a backdrop. Iran said it would continue to respond to the U.S. and continued to support the threat of closing the Strait of Hormuz. This is adding the traditional safe haven of gold, but it is creating an unusual situation in that reduced regional supplies are also creating an inflationary situation in rising energy and diesel costs. The higher energy costs are creating longer lasting global interest rates.
Tuesday saw the dollar weakening, creating a better overall monetary situation for precious metals. Gold is also benefiting from longer term institutional buying, with continued geopolitical tensions, coupled with slide purchasing, creating a major structural demand for gold. A Reuters survey showed these as the two driving forces for gold in 2026, geopolitical tensions, and Central Bank buying.
Like gold, silver is sensitive to the dollar, yields and geopolitical risk, but silver has a unique cyclical dimension from its heavy industrial use. This makes Tuesday’s gain in silver a reflection of the broader focus on precious metals as the dollar weakens, and while the market waits for more definition to come on U.S. inflation and the Fed.
Fundamental Bias: Gold bullish with a lean towards being moderately bullish, Silver bullish with a lean towards being moderately bullish. The U.S. PPI and CPI will be the next key data releases to drive the markets.
