Gold’s Decline: It Was Never the War
Author: Przemysław Radomski
Published: June 23, 2026
Summary
Gold and silver prices have seen significant declines, with silver dropping at a much faster rate than gold. The article argues that the recent downturn in precious metals is not due to geopolitical tensions, particularly the Iran conflict, but rather a result of market dynamics influenced by interest rate expectations and inflation pressures.
Market Dynamics
Following a peace deal in the Iran conflict, market sentiment initially shifted towards a softer Federal Reserve stance, with expectations of a rate hike by year-end dropping to around 57%. However, this sentiment quickly reversed, and the market is now pricing in a near 90% chance of a rate hike, with major banks like Deutsche Bank and Bank of America predicting a move as early as September. This shift is attributed to rising inflation, which is expected to climb to 4.1% from 3.8%.
Impact of the Dollar
The strengthening U.S. dollar, which recently closed above 100, is exerting downward pressure on gold prices. The article emphasizes that the decline in gold and silver is not a safe haven response to falling stock prices; instead, they are being sold off as investors seek liquidity amidst a broader market sell-off, particularly in high-beta stocks.
Speculative Market Trends
The article highlights the recent downturn in speculative trades, particularly in technology stocks, which has led to a liquidity crunch. As investors liquidate positions to raise cash, gold and silver are not acting as safe havens but rather as sources of liquidity, exacerbating their price declines.
Geopolitical Factors
While the article acknowledges that the Iran conflict may be winding down, it argues that the resolution does not provide support for gold prices. A stable peace is already priced in, and any resurgence in conflict could lead to higher oil prices, which would further pressure inflation and interest rates, negatively impacting gold.
Technical Analysis
The technical outlook for gold and silver remains bearish, with the dollar index confirming a breakout above 100. The author anticipates a significant upward move for the dollar, which could lead to further declines in precious metals. The article concludes that lower stock prices will likely lead to lower commodity prices, including precious metals and mining stocks.
Conclusion
The article provides a comprehensive analysis of the factors driving the decline in gold and silver prices, emphasizing that the geopolitical landscape is not the primary driver. Instead, it is the interplay of interest rates, inflation, and market liquidity that is shaping the current environment for precious metals.