As the second quarter came to a close, precious metals bulls sat through one of the sharpest corrections in decades. Gold pulled back over 14%, one of its worst quarters in years, while silver took the harder hit, falling over 21% in June alone. The reset brings both metals back to levels not seen since late 2025.
The rally into those highs was historic. A cutting Fed, a softer dollar, fiscal anxiety, and relentless central bank buying carried gold and silver to record levels. Six months later, the backdrop has flipped. A conflict in the Middle East lifted inflation, and a changeover at the Fed left us with a hawkish Warsh, firmer data, and a reversal of the dollar debasement trade, all pushing real yields higher and money toward coupon-bearing assets, with the expectation of at least one hike before year-end.
Which brings me to where we stand. Both metals are sitting on long-term support, and to my eye, the path of least resistance from here appears higher. The inflation story looks set to improve, with the worst of the conflict likely behind us and Warsh openly favoring trimmed-average measures that already read more favorably. Positioning has turned, with the put-call skew flipping positive for the first time in roughly a decade. And growth appears to have peaked, which would hand the Fed a reason to step back. My read is that this Fed travels from hawkish to neutral to dovish rather than actually hiking, and even if it does pull the trigger, I would lean toward one-and-done followed by cuts.
Daily Gold Chart
There is a seasonal tailwind, where gold has a long-standing tendency to firm from early July into early August, a window that has closed higher far more often than not, and it opens right as the new quarter gets underway.To help with the charting, we developed the Precious Metals Chart Pack, which delivers daily key levels for Gold, Silver, Copper, and Platinum, including the exact support, resistance, and trade setups I track for Blue Line Futures. Register: https://bluelinefutures.com/precious-metals-chart-pack/
Daily Silver Chart
Silver deserves its own word. It took the harder hit and tends to be the higher-beta expression of the same trade, which cuts both ways. It fell faster, but it also tends to lead on the way back up. With industrial demand from solar, electronics, and AI data centers still pulling against multi-year supply deficits, silver may have the most ground to recover, and the most torque if it does.
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None of this guarantees the low is in, and a decisive break of support would change the math. But the weight of evidence may be shifting back toward the bulls as we head into the third quarter.
Performance Disclaimer
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points that can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results all of which can adversely affect actual trading results.
