Heraeus: Fed's hawkish stance and the US-Iran agreement will put medium- to long-term pressure on gold and silver.
2026-06-23 01:28:09
Analysts at precious metals firm Heraeus said that as tensions between the US and Iran ease and geopolitical risk aversion cools, coupled with the market's continued digestion of the latest hawkish policy signals from the Federal Reserve, the medium- to long-term price trends for gold and silver are under pressure.
Analysts pointed out in their latest market report that the Federal Reserve's removal of its accommodative monetary policy stance directly impacted precious metals prices. Gold and silver prices initially strengthened this week, but the Fed, while maintaining its benchmark interest rate at 3.5%-3.75%, removed the dovish tone from its policy statement. This adjustment aligns with Fed official Kevin Warsh's reform direction of streamlining monetary policy communication, and the core reason for the policy shift is high US inflation—the US CPI rose 4.2% year-on-year in May, significantly exceeding the Fed's 2% inflation target.
The Federal Reserve's recent policy meeting released a clearly hawkish signal, becoming a key negative factor suppressing precious metals. The Fed's summary of economic projections showed that half of the members anticipated a rise in short-term interest rates, with 9 out of 18 participants expecting a rate hike before the end of 2026, and only one predicting a rate cut. Meanwhile, Fed Chairman Kevin Warsh, chairing the meeting for the first time, emphasized adhering to the price stability goal, placing significant emphasis on combating inflation, highlighting his hawkish policy style. Currently, the market is widely focused on whether this hawkish stance is a short-term adjustment to high energy prices or a long-term shift in the Fed's monetary policy.
With the US-Iran reconciliation finalized, high energy prices continue to support tighter monetary policy.
Geopolitically, on June 17, the US and Iran formally signed a memorandum of understanding, comprehensively ending hostilities and lifting the blockade of the Strait of Hormuz. This included core provisions such as unfreezing Iranian assets, establishing a reconstruction fund, and Iran's commitment to denuclearization, continuously boosting market risk sentiment and significantly weakening the geopolitical safe-haven support for precious metals. However, Heraeus analysts pointed out that the crude oil market will still need several months to fully recover. Factors such as waterway clearing, tanker insurance, ocean shipping, and inventory replenishment will keep energy prices high for an extended period, forcing central banks in many countries around the world to continue their interest rate hike cycle, further negatively impacting gold and silver.
In terms of market conditions, spot gold gave back some of its previous gains in early trading on Monday, with the price quoted at around $4,187 per ounce, up 0.76% on the day. The short-term trend is relatively firm, but the medium- to long-term downward pressure pattern remains unchanged.
Silver faces two major headwinds: a sharp drop in import demand and pressure from the Fed's hawkish stance.
Silver is facing pressure from both the demand side and policy side, resulting in a weaker performance compared to gold. On the demand side, a significant weakening of Indian silver import data has become a key factor dragging down silver prices. Data shows that India's silver imports in May this year were only 1 million ounces, a sharp drop of 94% compared to 17.2 million ounces in May 2025. However, the base figure for the same period in 2025 is exceptionally high due to import tariff reductions and a surge in investment and industrial demand, limiting its reference value. Using the import data of 2.7 million ounces in May 2024 as a reasonable benchmark, India's silver imports in May this year declined by 63% year-on-year.
The core reason for the sharp decline in imports is India's increase in silver import tariffs on May 13, raising the rate from 6% to 15%, and classifying silver as a restricted import item, significantly increasing the difficulty of import approval and customs clearance. India is a core global silver consumer market, accounting for 18% of the global silver demand of 210 million ounces by 2025. The sharp contraction in India's imports has directly and severely damaged the fundamentals of the global silver market.
From a policy perspective, the Federal Reserve's hawkish stance completely ended the short-term rebound in silver prices driven by the positive impact of the US-Iran agreement. Before Kevin Warsh chaired his first Fed meeting, silver prices briefly broke through $71/ounce. After the meeting released strong signals against inflation, silver prices quickly fell, dropping to a low of $63.3/ounce. Analysts say that the Fed will maintain its hawkish tone until US inflation data clearly falls back to the 2% policy target. Even if the Strait of Hormuz is fully reopened and energy prices gradually decline, silver prices will remain under long-term pressure from monetary policy.
The latest market data shows that spot silver continued to fluctuate at high levels in early trading on Monday, with the latest price at $65.39 per ounce, up 0.9% on the day. There is a short-term technical rebound, but the medium- and long-term downward trend is difficult to reverse.
Analysts pointed out in their latest market report that the Federal Reserve's removal of its accommodative monetary policy stance directly impacted precious metals prices. Gold and silver prices initially strengthened this week, but the Fed, while maintaining its benchmark interest rate at 3.5%-3.75%, removed the dovish tone from its policy statement. This adjustment aligns with Fed official Kevin Warsh's reform direction of streamlining monetary policy communication, and the core reason for the policy shift is high US inflation—the US CPI rose 4.2% year-on-year in May, significantly exceeding the Fed's 2% inflation target.
The Federal Reserve's recent policy meeting released a clearly hawkish signal, becoming a key negative factor suppressing precious metals. The Fed's summary of economic projections showed that half of the members anticipated a rise in short-term interest rates, with 9 out of 18 participants expecting a rate hike before the end of 2026, and only one predicting a rate cut. Meanwhile, Fed Chairman Kevin Warsh, chairing the meeting for the first time, emphasized adhering to the price stability goal, placing significant emphasis on combating inflation, highlighting his hawkish policy style. Currently, the market is widely focused on whether this hawkish stance is a short-term adjustment to high energy prices or a long-term shift in the Fed's monetary policy.
With the US-Iran reconciliation finalized, high energy prices continue to support tighter monetary policy.
Geopolitically, on June 17, the US and Iran formally signed a memorandum of understanding, comprehensively ending hostilities and lifting the blockade of the Strait of Hormuz. This included core provisions such as unfreezing Iranian assets, establishing a reconstruction fund, and Iran's commitment to denuclearization, continuously boosting market risk sentiment and significantly weakening the geopolitical safe-haven support for precious metals. However, Heraeus analysts pointed out that the crude oil market will still need several months to fully recover. Factors such as waterway clearing, tanker insurance, ocean shipping, and inventory replenishment will keep energy prices high for an extended period, forcing central banks in many countries around the world to continue their interest rate hike cycle, further negatively impacting gold and silver.
In terms of market conditions, spot gold gave back some of its previous gains in early trading on Monday, with the price quoted at around $4,187 per ounce, up 0.76% on the day. The short-term trend is relatively firm, but the medium- to long-term downward pressure pattern remains unchanged.
Silver faces two major headwinds: a sharp drop in import demand and pressure from the Fed's hawkish stance.
Silver is facing pressure from both the demand side and policy side, resulting in a weaker performance compared to gold. On the demand side, a significant weakening of Indian silver import data has become a key factor dragging down silver prices. Data shows that India's silver imports in May this year were only 1 million ounces, a sharp drop of 94% compared to 17.2 million ounces in May 2025. However, the base figure for the same period in 2025 is exceptionally high due to import tariff reductions and a surge in investment and industrial demand, limiting its reference value. Using the import data of 2.7 million ounces in May 2024 as a reasonable benchmark, India's silver imports in May this year declined by 63% year-on-year.
The core reason for the sharp decline in imports is India's increase in silver import tariffs on May 13, raising the rate from 6% to 15%, and classifying silver as a restricted import item, significantly increasing the difficulty of import approval and customs clearance. India is a core global silver consumer market, accounting for 18% of the global silver demand of 210 million ounces by 2025. The sharp contraction in India's imports has directly and severely damaged the fundamentals of the global silver market.
From a policy perspective, the Federal Reserve's hawkish stance completely ended the short-term rebound in silver prices driven by the positive impact of the US-Iran agreement. Before Kevin Warsh chaired his first Fed meeting, silver prices briefly broke through $71/ounce. After the meeting released strong signals against inflation, silver prices quickly fell, dropping to a low of $63.3/ounce. Analysts say that the Fed will maintain its hawkish tone until US inflation data clearly falls back to the 2% policy target. Even if the Strait of Hormuz is fully reopened and energy prices gradually decline, silver prices will remain under long-term pressure from monetary policy.
The latest market data shows that spot silver continued to fluctuate at high levels in early trading on Monday, with the latest price at $65.39 per ounce, up 0.9% on the day. There is a short-term technical rebound, but the medium- and long-term downward trend is difficult to reverse.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
