Gold & Silver Market Update: Geopolitics Takes the Wheel Again

AVS Bullion Market Watch — July 9, 2026

If you've been watching the metals this week, you've seen exactly how fast sentiment can turn. Gold and silver rallied hard on soft jobs data, then gave much of it back within days as the Middle East flared up again. Here's what's actually driving the market right now, and the bigger trends sitting underneath the daily noise.

The Whiplash Week

Early in July, gold and silver were on a tear. June's non-farm payrolls report came in at just 57,000 jobs — barely half of what Wall Street expected — and traders quickly priced out the odds of further Fed rate hikes. That combination pushed gold up 2.3% on the week to around A$6,035/oz and silver up nearly 4% to around A$89/oz, gold's first weekly gain in five weeks.

That didn't last. When President Trump declared the interim Iran peace agreement "over," oil prices jumped more than 5% on the spot, and the calculus flipped. Higher energy costs mean more inflation pressure, which means the Fed has less room to cut — or more reason to hike. Gold slid back over 1% to around A$5,845/oz, and silver dropped roughly 2% to about A$84/oz, its lowest level since December 2025.

(AUD figures converted at the current AUD/USD rate of ~0.693. Note that a chunk of this week's move in Australian-dollar gold and silver has come from currency swings, not just the US-dollar spot price — the Aussie dollar itself weakened about 1.4% over the past month, which alone pushes local gold and silver prices higher even when USD spot is flat.)

The lesson for anyone holding physical metal: geopolitical risk premium is a two-way street. It can push prices up on safe-haven demand, but it can also work against precious metals when it drives inflation-fighting rate hikes. Right now, that second dynamic is winning.

Central Banks Are Still Quiet Accumulators

While retail sentiment swings day to day, the official sector keeps building. China posted its largest monthly gold reserve increase in over two and a half years in June, extending a buying streak that's now run 20 months straight.

Zooming out to the year so far, the pattern is clear: Poland (64 tonnes), Uzbekistan (33 tonnes), China (25 tonnes), and Kazakhstan (20 tonnes) are the biggest buyers, while Turkey (-81 tonnes) and Russia (-34 tonnes) are net sellers — the latter widely read as a sign of fiscal strain from sanctions and war spending rather than any loss of conviction on gold itself.

There's also a quieter but telling trend: a growing number of central banks are repatriating their gold reserves back to domestic vaults, citing rising geopolitical risk. When central banks want their gold at home rather than held abroad, that's usually a signal they're planning for a less stable world, not a more stable one.

Inflation: A Genuinely Mixed Signal

Here's where it gets interesting. The Cleveland Fed's inflation nowcast has actually turned negative month-over-month for both June and July — a rare reading that would normally argue for rate cuts and take some wind out of gold's "inflation hedge" case.

But that data point is now competing directly with the oil-driven inflation risk from the Iran situation. Markets haven't fully resolved which force wins yet, and that tension is a big part of why prices have been so choppy.

Where Rates Stand Heading Into Key Dates

• US Federal Reserve: Holding at 3.50%–3.75% for a fourth straight meeting. The next decision lands July 29, with June CPI data due July 14 — likely the single most important data point for gold in the next few weeks. Markets currently price roughly 80% odds of another hold.
• Reserve Bank of Australia: Holding at 4.35%. Core (trimmed-mean) inflation actually accelerated to 3.6%, and more than half of surveyed economists expect another hike, most likely at the August 11 meeting.
• European Central Bank: Raised rates 25bp in mid-June, taking the deposit rate to 2.25%.
• Bank of Japan: Lifted its policy rate to 1% in late June, continuing its slow normalization path.
• People's Bank of China: Held lending rates steady for a 13th straight month, taking a wait-and-see stance as domestic inflation ticks higher.

The Bottom Line for Bullion Buyers

Short-term price action is being whipsawed by the Iran situation and shifting Fed rate-hike odds — that's the noise. The signal underneath is that major central banks, particularly in Asia and Eastern Europe, continue to build physical gold reserves and are increasingly bringing that gold home. That combination of persistent official-sector demand and elevated geopolitical risk is the backdrop that's kept gold above A$5,800/oz and silver in the mid-A$80s even through a volatile week. For Australian buyers, it's also worth remembering that a softer Aussie dollar has been amplifying local price moves in both directions — worth keeping an eye on alongside the US-dollar spot price.

As always, this update is for informational purposes and isn't investment advice — precious metals carry price risk in both directions, and decisions about buying or selling should be made based on your own goals and circumstances.

Have questions about current pricing or want to talk through your options? Reach out to the AVS Bullion team any time.