Precious metals extended their July slide on Thursday as investors continued to reprice the odds of another Federal Reserve rate hike this year. Spot gold settled at $4,036.14 per troy ounce on July 16, down 0.60% from the previous session, while silver fell 2.45% to $56.32 per troy ounce, according to Trading Economics data.
The declines mark a sharp turn from the record run precious metals enjoyed earlier in the year. Gold is now trading roughly 27% below its January all-time high of $5,589, and silver sits 52% under its January peak of $121.64. Over the past month, gold has shed 5.25% and silver has plunged 17.04%, though both remain firmly higher on a year-over-year basis — gold up 20.89% and silver up 47.64%.
A Split Fed Reprices the Curve
The proximate driver has been the release of the June FOMC minutes on July 8, which laid bare a rare 9-to-8 split among Federal Reserve officials on whether the central bank needs to raise rates again before year-end. Nine of the eighteen participants who submitted projections expect at least one additional hike, while eight see no change from the current 3.50%–3.75% target range set at the June 16-17 meeting.
That hawkish lean caught markets flat-footed. Following the minutes, traders now price in roughly a 67% chance of a rate increase at the September meeting, up from 62% the prior day, according to the CME FedWatch tool. Higher expected real yields typically pressure non-yielding assets like gold and silver.
Softer Inflation, Firmer Dollar
The bearish rates picture has come despite genuinely encouraging inflation news. June CPI printed at 3.5% year-over-year, a significant deceleration from May's 4.2%, and U.S. producer prices unexpectedly declined in June for the first time in nearly a year on softer energy costs.
Those data points should be constructive for silver in particular. Instead, a firming dollar and rising oil prices — driven by escalating tensions in the Middle East — have kept a lid on any rally attempts. The gold-silver ratio has climbed back to 69.2:1, near the top of its 50-year historical range, a level many analysts read as a sign silver is undervalued relative to gold.
Wall Street Still Sees Upside
Despite the near-term weakness, sell-side price targets remain elevated. J.P. Morgan Global Research still forecasts gold averaging $6,000 per ounce by the fourth quarter of 2026, with the metal rising toward $6,300 by year-end 2027. Goldman Sachs trimmed its own year-end 2026 gold target from $5,400 to $4,900 in June, citing the shift away from imminent rate cuts and fading ETF inflows, but the revised number still implies significant upside from current levels.
Silver forecasts remain equally constructive. The LBMA's 2026 analyst consensus stands at $79.57 per ounce, and JPMorgan's base case is $81. Goldman Sachs analysts have flagged $85 to $100 as achievable if industrial demand — particularly from solar and electronics — holds firm.
What to Watch Next
The immediate catalyst is the July 28-29 FOMC meeting. A hold decision would ease real-yield pressure on both metals, while a hike — or explicitly hawkish forward guidance — would likely extend the current correction. Investors will also parse July CPI data due next month for confirmation that June's cooler print was more than a one-month reprieve.
Sources: Trading Economics, CNBC, GoldSilver.com, USAGOLD, J.P. Morgan Global Research, CME FedWatch, LBMA.