Editor's Picks: Gold, Silver Face Bumpy Week as Prices Drop, Then Rebound
With an eye for detail and over a decade of experience covering the mining and metals sector, Charlotte is passionate about bringing investors accurate and insightful information that can help them make informed decisions.
She leads the Investing News Network's video and event coverage, and guides a team of writers reporting on niche investment markets.
Gold and silver prices fell and then bounced back this week as investors reacted to Iran war developments and inflation concerns.
It was a bumpy week for the gold price, which dropped to the US$4,370 per ounce level midway through the period before rebounding back above US$4,500.
Silver put on a similar performance, bottoming out at US$72 per ounce.
Both precious metals were reacting to a complex array of dynamics, including the latest Iran war developments. The situation continues to fluctuate, and the declines in gold and silver came as the US and Iran exchanged attacks despite the ongoing ceasefire.
At the time of this writing on Friday (May 29), the two countries had reportedly reached a deal to extend the ceasefire by 60 days and start negotiations on Iran's nuclear program; however, neither side had officially confirmed acceptance, meaning the deal may not hold.
The rise in hostilities boosted the US dollar and oil prices midweek, with those moves increasing concerns about inflation and discussions around higher interest rates.
The release of the latest US personal consumption expenditures (PCE) price index data also contributed to rate conversations. PCE rose by a seasonally adjusted 0.4 percent month-on-month in April, and 3.8 percent from the year-ago period — the highest since May 2023.
Core PCE, which excludes the more volatile food and energy categories, was up 0.2 percent on a monthly basis and 3.3 percent from the same time last year.
Core PCE is traditionally the Fed's preferred measure of inflation, and market watchers use it to gauge what could be next for rates. In a potential shift, Kevin Warsh, who has taken Jerome Powell's place at the helm, prefers to look at trimmed averages. That approach removes outlier results, but analysts have suggested it may not provide an accurate picture of what's happening.
Going back to gold and silver — were this week's lower prices just a blip on the radar, or do they signal the start of a summer slowdown? I heard from Ronald-Peter Stoeferle of Incrementum and the "In Gold We Trust" report, who encouraged investors to temper their near-term expectations:
"I wouldn't expect too much for gold and silver over the next couple of weeks. Probably after the World Cup is done — I think then perhaps there's going to be more upside, but that's just correlation, not causation. Historically, mid-summer, somewhere at the end of July, beginning of August, has often been kind of the bottom for gold and silver, and especially the miners."
Looking longer term, Stoeferle's outlook is much stronger — he believes this is a "golden decade" for gold, and said that the metal is on track to meet his target of US$8,900.
Speaking of seasonality, I also heard this week from Justin Huhn of Uranium Insider.
As always, he gave a great overview of uranium supply, demand and price dynamics, emphasizing his bullish long-term outlook. But Huhn also said the market's cyclicality makes it "very tradable" — and in his view, right now could be a good time to consider buying low:
"It can be difficult to put money to work when the sector has pulled back, when the volatility is high, when sentiment is very, very poor. That's the time when you actually want to be buying, and it can be difficult to do that if you don't have a strong foundation and a strong outlook for what's coming in front of us. So you have to understand the physical market more than anything in order to have that conviction."
Bullet briefing — Cameco back in action, aluminum prices up
Cameco operations back in action
On the topic of uranium, major miner Cameco (TSX:CCO,NYSE:CCJ) has resumed full production at its Key Lake mill and McArthur River mine in Saskatchewan.
Operations were disrupted earlier this month by the partial collapse of a bridge in the area. It serves as the company's primary transport route for essential operating materials. The route has not yet been restored, but Cameco has been able to use a secondary pathway for delivery.
Although the incident had raised questions about Cameco's 2026 guidance, the company said its production expectations remain unchanged.
Aluminum price hits four year high
The Iran war continues to impact a wide variety of commodities, and this week aluminum was in focus as London Metal Exchange prices reached their highest level in four years.
The conflict has resulted in a global shortage of the industrial metal, with smelters in China working above their capacity to take advantage of the supply crunch.
Now, however, traders are concerned about output cuts in the Asian nation amid government inspections focused on energy use and emissions.
Sector participants are projecting that Chinese exports of the metal could hit a record of over 680,000 metric tons in the months to come after rising 15 percent in April.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
