The End Is Near: Gold Price Outlook

It has been a frustrating first half of the year as precious metal prices sustained a stout price pullback since the Iran War began on February 28. Inflation expectations soared and rate hike projections increased. However, have we reached "Peak Hawkishness" and, with it, the lows of the year for gold and silver prices? Maybe so. Let's discuss.

You'll recall that the year began with an expectation of federal reserve rate cuts. Price inflation was continuing to slow from the highs of 2022, and it was expected that the Fed and whoever was chosen to replace Jerome Powell would begin to cut rates by mid-year, with perhaps as many as two fed funds rate cuts by year end.

That all changed with the onset of the Iran War and the sharply higher energy prices that came with it. Inflation expectations rose sharply as did interest rates and the U.S. dollar index. Projections for Fed policy shifted from rate cuts to rate hikes, and all of this combined to drive precious metal prices backward. From March 1 to June 29, the gold price fell from $5400 to $4000. That's 26%. Ouch! Even worse, the silver price fell from $94 to $56. Oooof.

Follow live precious metals pricing with the spot price charts.

Peak Hawkishness and Gold Market Analysis

However, all bad things eventually come to an end. At TF Metals Report, we began to consider that the markets had reached "Peak Hawkishness" back in late June in the days that followed the June FOMC meeting and Warsh's hawkish initial press conference. In my morning update of June 25, I wrote about this "Peak Hawk" idea, and in the interest of helping soothe nervous precious metal stackers, I made that post publicly available. It still is, and if you'd like to read it, you can find it here.

To summarize, the notion behind "Peak Hawk" was that the idea of multiple rate hikes was delusional. Could one rate hike later this year be possible? Sure. Anything's possible and you never know for certain what the future holds. Again, think back to how things looked on February 27 before the war began.

But the theory that multiple rate cuts were coming seems wrongheaded. Why? Because after the Iran War began, the crude oil price surged from $65 to $110, and this rightly dragged inflation expectation higher. But with the cessation of (most) hostilities last month, the crude oil price has round-tripped back to $68. See below:

Crude Oil Price Chart

Review the latest gold spot price chart to compare recent market trends.

Inflation Trends and Precious Metals Performance

Accordingly, the energy component of the CPE (the Fed's favorite inflation measure) spiked 21% from March to May. But now that the crude oil price is back to pre-war levels, why shouldn't we expect a sharp drop in the months ahead?

Energy Component Inflation Chart

Track current silver market movements with the silver spot price chart.

For the sake of brevity, I'll cut to the chase. Inflation concerns are easing and, accordingly, the risk of fed funds rate hikes will be easing too. Though a symbolic hike is still possible in the months ahead, it's quite likely that Fed policy will soon shift back to what Warsh was originally selected to produce, namely rate cuts that allow for lower net interest costs and negative real interest rates. If I'm correct about this, the gold and silver price lows of late June are very likely to be the price lows of 2026.

Gold and Silver Price Forecast for 2026

That said, I'm not expecting a V-shaped recovery in gold and silver prices. The chart damage has been significant as prices remain in a technically-bearish configuration and below all of the key moving averages. Simply moving sideways from here can run out the clock of the bearish indicators and begin to shift sentiment, and that's what I'm expecting for a while. In the short term, watch the 20-day moving average for clues. If/when gold and silver move back above this initial trend indicator, you can begin to grow in confidence that the lows of the year are behind us.

Gold - Daily Candlestick Chart

Silver - Daily Candlestick Chart

Learn more about owning physical precious metals with gold bars and coins and silver bars and coins. You can also read "COMEX Gold Options Speculation" and "Gold Price Performance In 2026" for additional market insights.

In summary, with the Iran War ending and energy prices falling, the second half of 2026 is likely to see CPI and PCE price inflation that comes in below expectations. This will signal that "Peak Hawkishness" has come and gone and that gold and silver investors can soon get back to focusing upon the fundamentals that had driven prices higher in 2024 and 2025.