In 2026, the precious metals market is experiencing a mix of extremes.
Early in the year, the international gold price briefly touched a historic high of $5,600 per ounce, leading markets to proclaim the continuation of a "golden era." However, the sudden escalation of U.S.-Iran tensions in the first quarter, a geopolitical conflict that traditionally boosts gold, was instead accompanied by a significant retreat in the gold price. Over the past two months, the gold price has largely fluctuated within a narrow range around $4,500 per ounce, with market sentiment shifting from fervor to caution.
Simultaneously, the silver market has undergone an "epic" cycle—once reaching a historic high of $121.6 per ounce, with its global market value surpassing $5 trillion for the first time. By the end of May, the silver price had retreated to around $75 per ounce.
Has the long-term bullish logic for gold fundamentally changed? What catalysts are needed to break the current stalemate? Which attribute—industrial or financial—is dominating silver?
At a recent wealth conference, analysts discussed these questions.
Gold's Long-Term "Safe-Haven" Status Remains Intact
In traditional thinking, geopolitical conflicts often directly drive up gold prices. However, during the intensification of Middle East conflicts this year, the gold price not only failed to strengthen but came under pressure and declined.
In the first quarter of 2026, U.S.-Iran tensions escalated sharply, briefly disrupting traffic in the Strait of Hormuz. Meanwhile, the gold price fell from its historic high near $5,600 per ounce at the start of the year to briefly breach the $4,400 per ounce level in late May, a retreat exceeding 20%. This divergence left the market collectively puzzled.
One analyst pointed out that a major underlying factor has changed: extreme liquidity abundance has altered gold's behavior pattern. During the 2022 Russia-Ukraine conflict, fiscal policy was contractionary, monetary expansion had halted, and overall market liquidity was not ample. This time, the opposite is true—liquidity is excessively abundant.
He further explained that in such a liquidity-rich environment, gold's gains earlier in the year attracted a massive influx of leveraged and institutional funds. This "chasing rallies" behavior itself is no longer driven by safe-haven logic but by a typical risk-asset allocation logic. Consequently, when geopolitical risks arise, gold faces pressure.
Beyond the change in underlying liquidity, another analyst noted that the strength of gold's safe-haven attribute also depends on the scale of the conflict. For small-scale regional friction, gold might temporarily reflect safe-haven demand, which can be seen as an event-driven opportunity. However, the duration of the current Middle East conflict and the magnitude of the oil price shock have both exceeded market expectations. In this scenario, gold was "caught in the crossfire" during a sell-off, being sold alongside other risk assets like stocks.
Both analysts stated that from a long-term perspective, gold's value as a safe haven has not disappeared.
One explained that if considering the impact of a single war, its safe-haven effect might not be obvious. But if the goal is hedging against risks like global currency over-issuance or persistent debt growth, gold's hedging effect remains very strong. Over the past two decades, the gold price has significantly outperformed major indices like the S&P 500 and the CSI 300, trailing only the Nasdaq.
Gold may not be the fastest-growing asset, but it is a relatively balanced intermediate asset. Therefore, while gold's safe-haven effect might seem to have failed in the short term, from a long-term dimension, its effectiveness in hedging against global debt monetization remains very solid.
Optimism for Gold's Long-Term Trajectory
For nearly two months, the gold price has been stuck in a narrow range around $4,500 per ounce.
One analyst views this stalemate as rooted in a deep split between gold's long-term and short-term driving logics.
The long-term factors behind gold's rise—global debt issues, diversification of reserve assets, and the rebalancing of debt and resource prices—have not changed. However, the short-term factors supporting the gold price have reversed significantly.
This reversal in short-term factors primarily points to shifting expectations for U.S. Federal Reserve monetary policy. In the fourth quarter of 2025, the market was betting on the Fed cutting rates three times cumulatively in 2026, totaling 75 basis points. It was this easing expectation that pushed the gold price from $3,700 per ounce to near the peak of $5,600 in January 2026. However, since 2026, consecutive U.S. CPI and PCE data have confirmed the stubbornness of inflation, compounded by the Middle East conflict pushing up oil prices, rapidly exhausting the market's patience for rate cuts.
Thus, the gold price is caught between two forces: the long-term logic still pulls it upward, while short-term interest rate pressure pushes it down.
Breaking the current gold price range requires two major catalysts: first, the Middle East geopolitical conflict moving toward resolution, easing oil price pressure; second, a tangible decline in U.S. inflation, allowing monetary policy room to turn marginally accommodative again. This sideways "tug-of-war" may persist for another 2 to 3 months until these two core variables materialize.
Once U.S. inflation pressure eases or monetary policy shifts toward marginal easing again, gold's upward elasticity will re-emerge.
Another analyst also expressed that the probability of an upward move far exceeds that of a downward move. He believes gold has not yet reached the "major peak" of this cycle. Historically, gold's two previous peaks occurred in 1980 and 2011. The current upward cycle began in 2020.
Regarding the logic for gold's rise, he outlined two threads. First, the political science theory of "hegemonic stability," which posits that the world is stable when there is a single hegemon. From this perspective, the current world is very unstable, and gold has not lost its value. Second, the economic thread: the essence of gold's rise is that economic growth is less than debt growth, and the global landscape remains debt-driven.
However, he believes positive catalysts could emerge within the next one to two months, such as potential Fed rate cuts or relaxation of bank capital regulations. From a technical perspective, the longest historical consolidation for gold is 3-4 months, so the current state, which has lasted 2 months, might end in another month or two.
A third analyst provided a perspective closer to the industry itself. He noted that as of 2025, China's gold production has ranked first in the world for 18 consecutive years, with an annual output of about 381 tons, but annual consumption is as high as 950 tons. In a state where supply and demand are already unbalanced, the mining depth of domestic mines is now close to 1 kilometer, and South Africa, once the largest gold producer, has reached a mining depth of 3 kilometers, with extraction costs continuously rising.
From the perspective of gold's supply-demand relationship, the possibility of a price increase is very high. By the end of the year, the gold price might potentially reach $5,000 per ounce.
Silver Takes the Spotlight: Financial or Industrial Attribute?
During the same period of gold's sharp fluctuations, silver's performance has also been remarkable. The spot silver price rose nearly 148% in 2025 and gained nearly 68% at its peak in 2026.
One analyst believes that currently, silver's financial attribute holds dominant weight. Compared to gold, while silver's trend is generally aligned in direction, it shows greater differences in rhythm and elasticity. During periods of relatively good economic performance or rising inflation, silver's elasticity is often greater than gold's. If conditions are more deflationary or demand is weaker, silver's performance tends to be weaker.
Another analyst stated that short-term rapid fluctuations in the silver price are driven by its financial attribute. For example, the historic high of $121.647 per ounce in January 2026 was a direct result of capital inflows in a liquidity-abundant environment.
He also emphasized that silver's long-term rise is founded on its industrial attribute. From a long-term perspective, silver's industrial attribute will continue to strengthen—emerging demand from photovoltaics, new energy vehicles, artificial intelligence, etc., already accounts for 50% to 60% of silver's industrial demand.
However, an analyst with deep industry experience offered a different view: personally, he believes silver has no financial attribute; it is purely an industrial product.
If gold is a large-cap stock, silver is a small-cap stock, easily manipulated by capital. He observed speculative sentiment in silver trading, even witnessing extreme premium phenomena—in some physical markets, the spot price for silver was 5 yuan per gram higher than the actual price. Furthermore, after being listed as a critical metal, export restrictions on silver have further supported its high price level.
Earlier this year, the gold-to-silver ratio once dropped to 48, hitting a 13-year low. By the end of May, the ratio had recovered to around 60. Although widely watched by the market, the roundtable guests generally agreed that the gold-to-silver ratio can serve as a general indicator but is usually not used as a precise investment trading signal.
One analyst explained that the historical range for the gold-to-silver ratio is very wide, from the 30s to over 100. For most of the time, it's not possible to make specific investment judgments based on the ratio alone. However, investors can use the general range of the ratio to assess which metal is relatively overvalued or undervalued. If an extreme ratio appears, one can watch for a potential correction opportunity.
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