Gold and silver rebounds may be difficult to sustain! Geopolitical and macroeconomic background have not experienced substantial changes, making it difficult to return to historical highs.

After experiencing a period of sustained selling pressure, the prices of precious metals have recently rebounded. In early trading on Wednesday, the spot price of gold rose by about 2.4% to $4119.04 per ounce; the spot price of silver was $59.47 per ounce, up by about 6.3% from the weekend price of $55.9 per ounce. However, analysts suggest that gold and silver prices may face a difficult road in returning to the historic highs set earlier this year. Commodity strategists Warren Patterson and Eva Manthe of ING stated in a report on Wednesday that the recent price increases in gold and silver were mainly due to "buying on dips after recent price weakness" rather than stemming from "substantial changes in geopolitical or macroeconomic backgrounds." Silver may outperform, gold may continue to struggle Despite experiencing a strong rally throughout 2025 and into this year, both gold and silver remain far below the historical highs set earlier this year. Both gold and silver reached their all-time highs at the end of January, with spot gold prices touching $5589.38 per ounce and silver prices reaching $121.67 per ounce. High interest rates and a strong dollar have weakened the appeal of precious metals, while the rise in oil prices due to the Middle East conflict has further shifted funds and trading logic in the market. Patterson and Manthe stated, "While tensions in the Middle East continue to provide support for precious metals, the market is balancing the relationship between weakening US economic data and rising energy costs bringing inflation risks." These analysts added that gold "may still remain highly sensitive to changes in the energy market and expectations for US monetary policy." However, they noted that if industrial metal markets continue to strengthen and hedging demand remains, silver "may continue to outperform gold." They stated, "Silver's performance not only reflects its hedging properties but is also supported by the overall improvement in the industrial metal sentiment, particularly driven by the performance of the copper market." In contrast, analysts at Bank of America believe that after posting the worst quarterly performance in 13 years through the end of June, gold still faces further downside risks. In a report on July 16, Bank of America stated, "Signals of a death crossover, high net long positions, and characteristics similar to major topping rallies increase the risk of a longer and deeper adjustment." The "death crossover" is a technical formation in which a stock's short-term moving average, usually the 50-day moving average, falls below the long-term moving average, usually the 200-day moving average. However, UBS is skeptical about the rebound potential of silver and advises investors not to rush into building silver positions. The Swiss bank has revised its attractive silver buying price target from around $55 per ounce to the range of $48 to $50 per ounce. UBS strategist Dominik Schnider wrote in a report on July 20, "We believe that the headwinds facing silver in the short term may persist as escalating tensions in the Middle East, higher opportunity costs, and a strong dollar will continue to weigh on investor sentiment." "From a macro perspective, the background facing silver has not provided enough impetus for investors to increase long positions. With investment demand showing instability, silver prices have yet to find a solid bottom." Mining companies: the long-term outlook for gold and silver remains bright Meanwhile, Diana Garrett, Chairman and CEO of Hycroft Mining, a US gold and silver developer, stated in an interview on Tuesday that the recent price declines in gold and silver are a "normal adjustment" and added, "This is not a bull market that has burst." She said, "The fundamentals of the commodity market are still very strong, especially for gold, as it has surpassed US Treasury bonds to become the number one asset class and is becoming the infrastructure of the financial system." "People do not want to hold hard assets supported by other countries' debts, and we have seen central banks continue to buy gold for 17 consecutive months. These data are very convincing." She added, "The same goes for silver, as it is not only a monetary metal but also an industrial metal. It is driving the artificial intelligence revolution and the development of supercomputers all areas that require silver and have no substitutes."