Three Other Things That Impacted Silver and Gold Prices Last Week

While most people are focused on Warsh’s Jackson Hole speech on Friday as a key factor that moved precious metal prices, there are three other things that are even more noteworthy when an investor is analyzing the price direction of gold and silver. We discuss those factors that went unnoticed due to the media buzz surrounding Fed Chair Warsh’s speech at Jackson Hole.

The first factor is Deutsche Bank’s publication of an upward revision to its price target for bullion in 2026. The bank started the year with a forecast of gold climbing to $6,000 an ounce by the end of the year. However, global events led the bank to cut its forecast multiple times. Last week, the bank revised its forecast from $4,600 to $4,800. That increase was the first upward revision this year, and the bank says gold is in an “explosive phase” that has only happened four times in the past. The first was in 1975, and the fifth time started in late 2024.

Hong Kong is finalizing preparations to be a trading hub for gold. The jurisdiction will start trading gold towards the end of the year, and trading will complement the value chain activities like refining, storage and clearing that have already been taking place there. Trial trading operations have gone well since July, so full operations will integrate seamlessly into the existing trading infrastructure in London and New York. This is a major infrastructure expansion, and such an expansion only happens when demand has justified such a move for a long time.

The third factor that moved precious metals markets last week was the announcement by the U.S. Treasury Department that it planned to step up its buyback of long-term bonds. Markets immediately saw that decision as one showing that bond yields were getting out of hand and this measure was aimed at trying to peg them back. Precious metals don’t provide a return to investors, so the buyback of long-dated bonds reduces the opportunity cost for owners of gold. Prices rallied as a result.

When you look at those three factors with a keen eye, you begin to notice that the bigger picture for gold and silver prices is increasingly looking bullish and has been that way for a while. However, a news flash like the hawkish remarks made by Kevin Warsh can trigger a drop in prices since such news affects market sentiment. But sentiment is fickle, and savvy investors learn to keep their focus on the big picture while ignoring the “noise.” Otherwise, companies like New Pacific Metals Corp. (NYSE American: NEWP) (TSX: NUAG) would have a hard time making long-term plans if they jumped at every shift in market sentiment.

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