Gold and silver are maintaining recent levels, holding ground despite headwinds, but failing to push on to new highs.

Since hitting a new all-time high of $3,501.27 per ounce in April, gold has been fairly rangebound for the next four months. Despite some minor rises and falls, it has been stuck between $3,300 and $3,400 per ounce, and continues to trade at $3,340 today. Silver meanwhile has been above and below $38 per ounce since July, and is trading at $38.10 today.

190825 USD Chart

With the first four months of the year seeing major gains for gold the market has needed a period of consolidation to remain healthy, and gold’s ability to hold on to these historically high levels is a positive sign for the metal.

Inflation has proved sticky, and could climb higher in the months ahead as US tariffs result in higher prices for US consumers. Persistent inflation has forced interest rates the remain higher for longer, and helped stop the decline in the US dollar for now. Stock markets have also hit record levels as the US economy has so far held up to the trade uncertainty. All combined, gold could have pulled back sharply in the face of these headwinds, but has held up remarkably well.

Demand for the metal appears to have slowed somewhat, stopping gold’s momentum, but clearly remains robust enough to ensure any dips are bought into. In the near-term, the Federal Reserve are expected to cut US rates in September, with an 83.6% chance showing on the CME FedWatch tool. This will likely be a boost for gold, but could be priced-in somewhat given the market’s high expectations for a cut.

Geopolitical uncertainty remains, and so far gold has seen little reaction to the efforts for peace between Ukraine and Russia. A meeting yesterday between Zelensky, EU leaders, and President Trump is hoped to lead to a trilateral meeting between Trump, Zelensky and Putin, but markets remain cautious over whether peace can be achieved diplomatically.

Signs of a peace deal could see gold decline, but markets have been desensitised somewhat to events in Ukraine in recent years, and the price of gold has come a long way from the $1,800 levels of 2022 when the invasion began. Fed Chairman Jerome Powell will also be speaking at the Jackson Hole symposium this Thursday, so markets will be looking for any hints on the Fed’s direction of travel with US rates. Anything that confirms rate cuts are coming will likely boost gold, while a cautious tone could add further pressure.