The markets did not wait long to react. Faced with weaker American economic indicators, investors immediately strengthened their positions in gold, restarting the rise of the precious metal. Behind this movement lies a major change in perspective: expectations surrounding the Federal Reserve's next decisions are evolving, weakening the dollar and reshuffling the cards for all financial assets. From precious metals to cryptos, this new reading of the American economy could redefine investors' strategies in the weeks to come.
In brief
- Precious metals are rising again after weaker than expected US employment figures, reviving expectations around the Federal Reserve.
- Silver outperforms gold on sustained industrial demand, while major banks revise their forecasts for the coming months.
- Central bank purchases and geopolitical tensions continue to strengthen the appeal of precious metals as safe havens.
The rise in the price of gold
This Friday, July 3, precious metals recorded their strongest weekly performance in more than a month, propelled by a particularly disappointing US employment report. The Bureau of Labor Statistics has announcement macroeconomic indicators that are very far from investor expectations:
- Non-agricultural job creation: only 57,000 positions created in June, compared to the 110,000 initially anticipated by the consensus of economists;
- The overall unemployment rate: a technical rise which now stands at 4.2%, confirming the slowdown in private wage growth;
- The spot gold price: closed session at $4,174.21 per ounce on Friday, rising to $4,187 on Saturday, July 4.
The reaction of market operators was not long in coming to this deterioration in employment, profoundly changing monetary expectations. Thus, the probability of an interest rate hike by the Federal Reserve at its September meeting, as measured by the CME FedWatch Tool, fell from 66% to a range between 53% and 54% in the days following the release.
This decline in expectations of monetary tightening has mechanically weakened the dollar and lowered real yields, creating a highly favorable environment for gold which generates no interest on its own. Faced with this new economic situation, analysts remain cautious but optimistic, like the strategists of the OCBC bank who describe now their short-term outlook on gold as “cautiously constructive”.
The rush on money and the big shift in banking forecasts
Beyond the surge in gold, it was the silver market that really stole the show by posting a spectacular increase of 7% to settle above $62.4 per ounce, after starting from $58.3. This outperformance can be explained by the dual identity of silver, sought after both as a store of value and as an essential industrial component.
Long-term structural demand remains driven by the massive boom in electronics, electric vehicles and the solar panel industry, which helped offset the decline in prices experienced in the second quarter. This asymmetric move caused a notable tightening in the gold-to-silver ratio, which measures the number of ounces of silver needed to buy one ounce of gold, bringing it down to 66.9 to 1 by the end of the period.
Such a rebound at the start of the month comes after a catastrophic period in June when gold fell by 10% (or -9.48% in euros to settle at 3,532.46 euros), sliding 22% below its historic peak at the start of 2026 located above $5,300. This plunge was caused by the restrictive tone of the new Fed president, Kevin Warsh, massive profit-taking (gold posting +26% over a rolling year), and the signing of the framework agreement between the United States and Iran which had temporarily eased geopolitical tensions.
Faced with such volatility, major investment banks have massively revised their year-end forecasts. Goldman Sachs lowered its target from $5,400 to $4,900, UBS went from $5,900 to $5,500, and JPMorgan reduced its forecast to $4,500 for the fourth quarter, far from the $6,000 it was still forecasting on June 9. JPMorgan also specifies that “the risks to its forecasts were tilted to the downside”while maintaining a bullish long-term view for 2027.
Institutional accumulation and the geopolitical outlook for precious metals
The sustainability of this rebound relies on important structural factors, first and foremost the insatiable appetite of institutions for tangible reserve assets. According to the latest World Gold Council survey, a record 45% of central banks surveyed plan to increase their holdings of the yellow metal over the next twelve months, while 9 out of 10 institutions expect an overall increase in gold's share of global reserves.
The popular properties, thanks to the on-chain data collected, are its performance in times of crisis for 49% of respondents, its ability to be a long-term store of value for 48%, and the fact that it presents no risk of default for 29% of them. At the same time, gold is taking root among leading private investors. A JPMorgan survey of 330 family offices each managing $1.2 billion finds that 28% of these entities hold gold, an allocation that immediately doubles among those citing geopolitical risk as a major concern.
The future development of precious metals will now closely depend on the next inflation data, which will determine whether this rebound takes hold or whether it gives way to a consolidation phase. For observers like economist Peter Schiff, the weakening of national currencies against gold shows that investors fleeing to the dollar are on the wrong track, arriving at the conclusion that they are jumping “from the frying pan directly into the fire”.
In a context where confidence in central banks is eroding and diplomatic agreements remain fragile, this quest for non-confiscable assets offers a particularly stimulating prospect for all alternative markets, including the crypto sector, despite the current market volatility.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
