Gold and Silver Market Update: July Wrap Up

Precious metals respond to changing market conditions

Although there have been periods of volatility this month, gold has been sitting around £3,030 per ounce, while silver has seen narrow movements in comparison to the sharp moves seen earlier this year.

Global events may have continued to grab the headlines, however it appears that the markets may be paying closer attention to economic data such as interest rate expectations, and this is playing an important role in moving the price of precious metals.

The latest meeting of the US Federal Reserve ended with interest rates being left unchanged, which gave gold a small lift. However, there is still some speculation on what the central banks will do next, with inflation remaining a key concern. Here in the UK, attention has also turned to the Bank of England’s interest rate decision, where rates have also remained unchanged at 3.75%. As always, these policies could influence both currencies and precious metals prices in the weeks ahead.

Demand remains resilient

Despite prices easing in comparison to the record highs seen earlier this year, demand for physical gold and silver has remained encouraging.

New figures released by The Royal Mint showed buying activity increased when gold briefly fell below £3,000 per ounce earlier this month. Physical silver also saw very strong year-on-year growth, as many buyers took advantage of lower prices after the highs seen during the first half of the year.

Looking ahead

As we move into August, it is likely that the markets could remain focused on inflation data, central bank decisions, and developments around the world. While geopolitical events can often create short-term changes in gold and silver, recent weeks have shown that expectations around interest rates can also have a great influence over precious metal prices.

No one can predict exactly what the weeks ahead will bring, but one thing is clear: gold and silver remain in the spotlight. With buyers continuing to show interest, the precious metals market looks set to remain worth watching as the summer progresses.