The gold price was on the move this week, pushing back above the US$4,000 per ounce level and rising to nearly US$4,160 before pulling back.
Silver followed a similar trajectory, reaching a midweek peak of US$60.50 per ounce.
The precious metals were initially buoyed by increased conflict between the US and Iran, with a rise in attacks spurring investor interest in safe-havens assets.
However, as the period progressed, tensions in the Middle East began to have the opposite effect — supply chain and inflation concerns were reignited as both sides traded blows, with oil prices jumping above US$100 per barrel for the first time since May.
Attention is now shifting to the US Federal Reserve's next meeting, which is set to run from July 28 to 29. While CME Group's (NASDAQ:CME) FedWatch tool shows that most traders expect the central bank to leave interest rates unchanged, about a third anticipate a hike.
The gathering will be the second with Fed Chair Kevin Warsh at the helm, and market participants will be ready to go over any commentary he shares with a fine-toothed comb.
Warsh was nominated for the position by US President Donald Trump, who clashed frequently and publicly over rates with former Fed Chair Jerome Powell.
While Warsh has emphasized since his appointment that the battle against inflation isn't over, the broad consensus is that the Fed will ultimately lower rates.
Here's Byron King of Paradigm Press explaining the inevitability of that happening:
"I don't want to say (Warsh is) a one-trick pony, but he's definitely a pony who knows one trick. And the one trick that he knows is that he wasn't going to be nominated to be the head of the Federal Reserve unless he at least was leaning towards the idea (of lowering rates). You know, he can't come right out and say that, but (he'll) get them down. The guy has a job, and that's the job."
Developments in the US are often top of mind for gold investors, but this week China introduced a key change that has the potential to significantly impact the market.
As of Friday (July 24), major Chinese banks, including the Industrial and Commercial Bank of China, will no longer offer retail paper trading products linked to the Shanghai Gold Exchange.
Customers were advised to close their positions, liquidate their holdings or take physical delivery, with the banks citing protection from price volatility as the reason for the new rules.
That's tough to argue against after the big ups and downs in gold this year. But many experts believe there's more to the story than that. For Matthew Piepenburg of Von Greyerz, the situation represents a "massive turning point." Speaking at the Rule Symposium, he explained how China's move essentially pits physical gold against the west's vast paper markets:
"I've written ad nauseam for years about the Comex and the LBMA markets, and how they legalize price manipulation and fraud — legally. And China isn't stupid. They've been watching this since 1973 — the fixed game on the Comex in London and New York, and in the CME Group. They know that we use massive amounts of leverage to force the boot to the neck of gold and silver, so we don't have natural price discovery.
"Fast forward to 2026, China is saying for us to have more credibility, more trust and more natural price discovery, we are now going to try and make the paper trade — which it's an open secret that it's a lie — we're going to call the bluff on that. We're going to go focus more on physical supply and demand. Imagine that."
Piepenburg isn't calling for a sudden rise in the gold price on the back of this shift.
But he does think it will highlight the difference between gold trade in the east and the west — and he also believes it's clear which market will be seen as more trustworthy:
"What we're seeing is China playing chess as we're playing checkers. You can't have a 200 day moving average in physical gold in Shanghai and Hong Kong, and something totally different in New York and London, especially when one is priced on supply and demand from physical and the other is levered paper — toilet paper.
"And so this is an extremely boring technical change. Doesn't take a huge rabbit hole dive. All I'm saying is, if I own something and I give a claim to 10 people for the same thing, well, only one of those 10 gets it, and that's been the paper trade in silver and gold since the '70s. What Shanghai and Hong Kong and China in the east are doing is anchoring the trade in something more valuable — actual supply and demand. Less nonsense, less dishonesty. And that gives them more credibility."
Click here for a deep dive on the topic and what it could ultimately mean for the west.
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