The rebound in gold and silver may be hard to sustain! No substantial changes in geopolitical and macroeconomic backgrounds, challenging to return to historical highs

According to Zhitong Finance APP, after enduring a period of continuous selling pressure, precious metals prices have recently rebounded. In early trading on Wednesday, the spot gold price rose about 2.4% to $4,119.04 per ounce; the spot silver price was $59.47 per ounce, up approximately 6.3% from $55.9 per ounce at the end of last week.

However, analysts noted that gold and silver prices may still face a difficult path if they want to return to the historical highs set earlier this year. ING commodity strategists Warren Patterson and Ewa Manthey said in a report on Wednesday that the current rally in gold and silver is primarily due to “bargain hunting after recent price weakness,” rather than “any substantial change in the geopolitical or macroeconomic backdrop.”

Silver May Outperform, Gold May Remain Subdued

Despite a strong rally that lasted throughout 2025 and into this year, both gold and silver remain well below the historical highs they set earlier this year. Both metals hit record levels at the end of January, when spot gold reached $5,589.38 per ounce and silver hit $121.67 per ounce.

Elevated interest rates and a stronger dollar have diminished the appeal of precious metals, while rising oil prices driven by the Middle East conflict have further shifted capital flows and trading logic in other market areas. Patterson and Manthey stated: “Although ongoing Middle East tensions continue to provide some support for precious metals, the market is weighing the relationship between weakening US economic data and inflation risks resulting from higher energy costs.”

The two analysts added that gold “may remain highly sensitive to changes in the energy market and US monetary policy expectations.” However, they noted that if the industrial metals market continues to strengthen and safe-haven demand persists, silver “may continue to outperform gold.” They said: “Silver’s performance reflects not only its safe-haven qualities but is also supported by improved sentiment in the industrial metals sector, particularly driven by the copper market.”

By contrast, Bank of America analysts believe that after experiencing its worst quarter in 13 years for the three months ending in June, gold prices still face further downside risk. In a July 16 report, Bank of America stated: “Death cross signals, elevated net long positions, and similarities with major market tops all increase the risk for a longer and deeper correction.” The “death cross” is a technical pattern that occurs when a stock’s short-term moving average — typically the 50-day moving average — crosses below its long-term moving average, usually the 200-day moving average.

However, UBS holds a cautious view on the rebound potential for silver and advises investors not to rush into silver positions. The Swiss bank lowered what it considered an attractive silver buy-in target from about $55/oz to a range of $48-50/oz.

Dominique Schneider, a strategist at UBS, wrote in a July 20 report: “We believe the short-term headwinds facing silver may persist, as the escalating Middle East tensions, higher opportunity costs, and a strong dollar continue to dampen investor sentiment. From a macro perspective, the backdrop for silver does not provide enough momentum for investors to add long positions. Given the unstable investment demand, silver prices have yet to find a solid bottom.”

Mining Companies: The Long-term Outlook for Gold and Silver Remains Bright

Meanwhile, Diane Garrett, Executive Chairman and CEO of US gold and silver developer Hycroft Mining, said in an interview on Tuesday that the recent decline in gold and silver prices is “a normal correction,” adding that “this is not a broken bull market.”

She stated: “The fundamentals for the commodity market remain very strong, especially for gold, which has now overtaken US Treasuries to become the number one asset class and is becoming the backbone of the financial system. People do not want to hold hard assets backed by the debts of other countries, and we have now seen 17 consecutive months of central bank gold buying. These data are highly convincing.”

She added: “The same holds for silver, as it is not only a monetary metal but also an industrial metal. Silver is driving the AI revolution and the development of supercomputers—all these sectors require silver, and there is no substitute.”