(Kitco News) – Gold prices are benefiting from renewed momentum on lower rate hike expectations and strong central bank demand, while India’s new import controls drive domestic demand even lower, according to precious metals analysts at Heraeus.
In their latest update, the analysts noted that gold prices posted their best week since January on hopes for a deal to reopen Hormuz.
“Gold prices rose over 7% last week, breaking out of the range they have occupied since mid-June to finish trading at above $4,300/oz,” they wrote. “This comes as a deal between the US and Iran to reopen the Strait of Hormuz seems close to being announced (again). This has caused metal prices to rally across the board as both oil prices and real interest rate expectations fell. Silver also recorded its best week since January, rising by over 10%.”
Brent crude was also under $85 per barrel last week after hitting $100 on July 23. “This drop has coincided with the likelihood of a rate hike by the Federal Reserve at the 19 September FOMC meeting reducing,” they said. “Although there is still an expectation of at least one rate hike this year, if the Strait opens soon and oil prices continue to fall, lower consumer prices could diminish the case for monetary tightening.”
Heraeus noted that central bank gold buying accelerated in June, including purchases from new buyers. “Reported reserves increased by a net 51 tonnes during the month, up from 41 tonnes in May and almost double the 12-month average of 27 tonnes,” they wrote. “Poland and China remained the largest buyers, adding 19 tonnes and 15 tonnes, respectively. Uzbekistan added 9 tonnes, while Kazakhstan and Singapore each bought 7 tonnes. Jordan and the Czech Republic also increased their holdings. Russia and Turkey were both net sellers in the month, selling 9 tonnes and 2 tonnes, respectively, continuing the divergence between the central banks accumulating gold for reserve diversification and those mobilising holdings during periods of fiscal or financial pressure.”
“Reported net buying reached 102 tonnes in H1’26 despite combined sales of 127 tonnes by Turkey and Russia, indicating that official-sector demand remains an important source of support for gold.”
Spot gold traded as high as $4,362 per ounce overnight, but was trending lower after the North American open, and last traded at $4,330.42 for a loss of 0.27% on the session.
Turning to silver, Heraeus analysts noted that Indian silver imports were exceptionally low in July, well beyond the month’s typical seasonal weakness.
“Imports totalled 1.04 moz, down more than 92% year-on-year from 13.8 moz in July 2025 and only 3% higher than the 1.01 moz imported in June,” they said. “The collapse follows measures introduced in May, when India raised its customs duty on silver and began requiring prior government approval for import. The measures were intended to reduce precious metal imports, conserve foreign exchange and ease pressure on the rupee. They have also tightened domestic availability, with dealers reporting premiums of up to $6.50/oz over official domestic prices in early July despite seasonally weak demand.”
“India meets more than 80% of its silver requirements through imports, while its 210 moz of inflows in 2025 were equivalent to almost 19% of global demand,” they added. “Persistently low imports therefore weaken a major source of international physical demand.”
Silver prices are outperforming on Monday morning as they attempt to reclaim the $65 per ounce level.
Spot silver last traded at $63.961 per ounce for a gain of 0.63% on the daily chart.
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