After record three years of consecutive rally, precious metals are set for consolidation, with the metals entering the second quarter of loses on the back of deeper cuts in the first quarter.
While gold lost 12% to close at a 13-year quarterly closing low, silver lost much more at 18% sequentially. Compared with the January 29 peak of $5,600/ounce (28.35 grams) for gold and $127/oz for silver, the losses are much higher in Q2.
On the CME, the yellow metal closed 28% down, from its record peak, on June 30 at $4030.50 while the white metal shed 59.5% at $52.48 an ounce. For gold, this is the worst quarterly performance in 13 years and for silver, this is a four year poor show.
While gold is trading flat at $4,047/oz, silver is down 1% at $59/oz on the first day of trade in the new quarter on Wednesday.
These deep price reversals come after a dream-run of the past two years: gold surged over 65% in 2025, 28% in 2024 and 24% in the year before, while silver climbed 28%, following a 148% surge in 2025 and 22% in 2024 and 19% in the previous year and Q1 marks breaking a five-quarter streak of gains—with the yellow metal losing close to 12% in the June quarter, marking the steepest decline since December 2016, and silver closing 18% down, its sharpest fall since June 2022.
These steep corrections ironically coincided with a crippling war in West Asia, upending global energy supplies and sending crude and everything originating from hydrocarbons over the roof and completely missing the safe-haven rally even as the equities saw a steep fall and rise in inflation—the two events are ideal for rally but why the precious metals missed the same ironically?
According to analysts, the correction is mainly due to the strengthening of the dollar, along with the rising fear of interest hikes to tame inflation. In fact, the wartime dollar rally is the most surprising factor. The fact is that despite the US making many self-goals on Iran war, the dollar index continued to rally almost every day and in the third week of June it crossed the 102-mark, hitting a 13-month peak. The metals’ slide continued even after the truce announcement and crude oil erasing the war gains.
Saumil Gandhi, senior analyst, commodities, HDFC Securities, told TNIE that “the precious metals have entered a consolidation phase after an exceptional run in the past three years, which was primarily due to the geopolitical tension, record central bank buying, tariff and trade policy uncertainties, expectations of easier US monetary policy, and a relatively stable dollar. But the market is now witnessing a healthy correction as the macroeconomic backdrop has shifted. Profit booking was another reason for the poor show.”
Despite the near-term correction, the long-term outlook for the precious metals remains constructive, he said, as the ongoing central bank buying, elevated geopolitical risks, concerns over global fiscal sustainability, and continued demand for portfolio diversification are expected to provide structural support to gold and silver prices over the long-term.
“For Q2, gold expects to trade in broader range of `1,29,000-`1,75,000 and silver in the range of `1,75,900-`3,24,500.”
Similarly, Renisha Chainani, head of research at bullion trading platform Augmont, told TNIE both the metals reversed the explosive rally of FY26 in Q1FY27, primarily due to the hawkish Fed signals due to rising inflation which in the US hit 4.1% in May. Domestically, Customs duty hike from 6% to 15% further dampened jewellery offtake while DGFT’s restricted reclassification of silver imports compounded tightness for the metal.
“Both metals reflect a fundamentally bullish multi-year structure undergoing a necessary, healthy mid-cycle correction, with festive-season demand likely to test the next directional move. According to her, spot gold has support at $3,928 and $3,835, while resistance is found at $4,075 and $4,119.
