Silver Rebounds on Monday as Gold Defends $4,000 Floor
Silver bounced off an eight-month low, traded at around $56.45 after Monday's trading session, while gold held on to the $4,000 support level, as traders weighed potential Fed rate moves and the latest situations in the US-Iran conflict.
Silver price climbed over 1% to $56.43 an ounce after the close of Monday trading session, recovering from Friday’s ~$55 close, the metal’s weakest point since late of last year. The white metal had shed roughly 5% over the prior week.
Gold, on the other hand, had held significant $4,000 threshold it had defended recently after briefly dipping to $3,976 last Thursday. It has repeatedly breached $4,000 since June, its worst period since the 2008 crisis, and now sits 25% beneath January’s all-time record.
Both precious metals remain tethered to inflation expectations. The five-month US-Iran war has kept energy costs elevated, with American airstrikes aimed at preserving Strait of Hormuz passage entering their ninth consecutive night. Average gasoline prices have surpassed $4 a gallon. Swap markets now price in a mere 10% probability of a rate increase at the next Fed's gathering, although a lot of people believe we will have at the minimum one hike by year-end.
Chinese wholesale gold demand hovered near ten-year lows in June, and domestic gold ETFs recorded their worst month of outflows on record, according to the World Gold Council, even as the People’s Bank of China extended its purchasing streak to 20 months.
Veteran metals analyst John Gross has signaled a potential issue in the trading world: FINRA data shows debit balances in the U.S. margin accounts that have reached $1.5 trillion in June, a 67% jump since the end of 2024. Should markets correct, a lot of debts may have to be repaid, he wrote.
Related assets: Gold, Silver, Palladium, Platinum