Precious metals kept climbing on Monday. According to Heraeus’ latest report, despite lingering uncertainty over negotiations concerning Iran and the Strait of Hormuz, recent soft US economic data has pushed down short‑term US Treasury yields and expectations for further Federal Reserve rate hikes, lending support to gold. Meanwhile, silver has posted even stronger price performance alongside rising mine output and physical investment demand. Gold and silver are sending distinct yet broadly positive fundamental signals.
Spot gold advanced further during North American trading and was last quoted at $4425.20 per ounce, up 1.11% on the day. Spot silver outperformed, reclaiming the $66‑per‑ounce level at $66.389, for a 2.63% daily gain.
Weaker US Data Bring Rate‑Driven Tailwinds for Gold
Heraeus noted that gold trended higher overall last week, extending the powerful rebound from the prior week. While geopolitics still adds some risk‑premium support, market sentiment has cooled markedly compared with the early stages of the conflict.
Negotiations over the reopening of the Strait of Hormuz remain highly uncertain. Oil flows through the strait have nearly dried up since early July and inventories keep drawing down, yet international crude prices are still well below levels seen when hostilities first erupted.
As of August 14, the Brent‑WTI spread stood near $6 per barrel, wider than around $4 per barrel on August 5 when the US discussed a potential deal. This points to fading market confidence in a near‑term agreement. Even so, Heraeus pointed out that the spread often exceeded $10 per barrel in the early phase of hostilities, meaning geopolitical risk is still priced far lower than in the March‑June period.
Compared with geopolitics, US economic releases have become the immediate driver for gold.
Heraeus highlighted soft US employment data alongside CPI at 3.4% and PPI at 4.7%, both in‑line with or below market consensus. The 2‑year Treasury yield has fallen roughly 20 bASIs points from its late‑July peak, and market‑implied odds of a September Fed rate hike have tumbled from around 80% to roughly 35%.
This shift is highly meaningful for gold. Lower short‑term yields reduce the opportunity cost of holding non‑yielding bullion, while cooling rate‑hike expectations ease the pressure on gold from the US dollar and real interest rates.
Against this backdrop, gold’s recent resilience is not solely driven by safe‑haven buying. Repricing of interest‑rate expectations has emerged as a fresh pillar of support.
Barrick Gold Continues to Improve Output
On the mining front, Heraeus believes Barrick Gold remains on track to hit its full‑year production target.
The company reported attributable gold production of 796,000 ounces for the quarter, a 11% rise from 719,000 ounces in the prior quarter and above its quarterly guidance range of 730,000‑770,000 ounces.
Total output was roughly flat year‑on‑year, though gold production from continuing operations rose about 8% once divested assets are excluded.
Barrick maintains its 2026 full‑year production guidance of 2.9‑3.25 million ounces and expects sequential quarterly improvements, with the fourth quarter likely to deliver the highest output of the year.
This means major miners are ramping up output even as gold prices stay elevated, adding support to corporate profitability.
Silver Output Rises and Physical Demand Picks Up
Unlike gold, silver is seeing a notable rise in both supply and demand.
Heraeus reported that Pan American Silver posted attributable silver output of 6.47 million ounces in Q2, roughly flat quarter‑on‑quarter but up a sharp 27% versus 5.09 million ounces one year earlier.
Cumulative silver production for the first half reached 12.90 million ounces, a 28% year‑on‑year increase, landing in the upper half of its full‑year guidance of 12.15‑13.15 million ounces.
The company keeps its 2026 annual output target unchanged at 25‑27 million ounces.
Alongside greater supply, physical investment demand has staged a clear rebound.
Perth Mint figures show July sales of silver bars and coins hit 486,000 ounces, surging 65% from 294,000 ounces in June and rising 8% from 452,000 ounces in the same month last year.
Heraeus attributes this bounce to silver’s earlier dip to 2026 lows. Lower price levels drew back price‑sensitive investors and revived physical buying interest.
Even so, demand remains well below early‑year peaks. July volumes were only around half of March’s 976,000 ounces and roughly one‑quarter of near‑2‑million‑ounce sales recorded in February.
That suggests silver investment demand has improved, yet a full‑blown recovery is still some way off.
Gold Driven by Rates, Silver by Price Elasticity
While gold and silver are rallying together, their core drivers differ under the surface.
Gold is benefiting directly from softer US economic data, falling short‑term Treasury yields and fading Fed‑hike expectations, with geopolitical risks offering a floor.
Silver, besides the supportive macro rate backdrop, is additionally boosted by high price elasticity, expanding mine supply and rebounding retail physical demand.
In the short run, gold’s trajectory hinges on whether Fed policy expectations keep shifting toward looser settings. For silver, apart from rates, market participants will watch whether physical investment demand can sustain its recovery.
Should incoming US data remain weak and further dampen rate‑hike bets, gold could hold its strong high‑price stance. If risk‑on sentiment improves alongside, silver’s higher volatility may allow it to outperform gold in the near term.
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