July 2026 precious metals roundup
Written by Luke Heritage
2nd August, 2026
July was a volatile month, acting as a slight net recovery for both metals, with gold opening at $4006.57 an ounce and gaining around 2.5% to $4106 an ounce, disguising a dip below $4000 which was hidden behind a strong late-month rally. Silver told a similar story, opening at $58.42 an ounce and closing at $59.10 an ounce, up 1.16% after ranging between the mid-50s and low 60s within the month. The gold and silver ratio ended the month at around 69.48, its highest for months, meaning although both metals saw a net gain, gold's gain slightly outpaced silver's, thus resulting in a stretched ratio.
What was moving gold?
July's gold story consists of two stories stitched together, with the first half of the month seeing gold trade heavily, dipping to an intraday eight-month low, almost 30% lower than the January all-time high, after Fed officials flagged the possibilities of rate hikes and US retail sales data came in strong, keeping the dollar stable. But in the second half of the month, Middle East tensions pushed Brent crude and UK gas higher, which reignited gold's safe-haven bid just as the Fed's 29th July meeting resulted in a hold of the rates. The combination of a de-escalation in immediate hostilities late in the month and the confirmation that the Fed was not going to hike allowed gold to hit a rally at months end to above $4100 an ounce.
The World Gold Council's Q2 2026 Gold Demand Trends report published 30th July added a structural tailwind to gold with central banks purchasing a record 289 tonnes of gold in the second quarter, which is up 62% year-on-year, led by Poland taking its H1 total to 82 tonnes by adding 51, and China adding 33 tonnes, its largest quarterly addition since Q4 2023, taking reported holdings to 2,346 tonnes. That's central banks purchasing large quantities of gold into a market that had just fallen over 11%, an insightful signal.
Global gold ETFs reversed two months of outflows, with $3bn being added in July and lifting collective holdings to 4,068 tonnes, according to the World Gold Council, led by Europe adding $2bn, the second strongest monthly inflow of the year. On the futures side of things, COMEX net longs actually eased 4.4% over the month to 542 tonnes, a reminder that July's price recovery happened despite aggregate futures positioning and was driven more by ETFs and central bank gold buying.
What was moving silver?
Silver had another typical July as it followed the movements of gold in both directions, but it had an added degree of volatility due to the dynamics of its own industrial demand. In the first half of the month, silver declined along with gold, reaching lows in the upper $50s. After the ceasefire and the Federal Reserve's response to the ceasefire provided relief to the markets, silver rebounded in the second half of the month and briefly surpassed $60 before closing at $59.10.
Throughout the entire month, the gold/silver ratio consistently exceeded 69. Some analysts considered this level a genuine anomaly in terms of the market, especially considering the fact that silver's underlying structural support is arguably stronger than gold's. For example, silver has experienced its sixth consecutive annual supply deficit. Approximately 70 per cent of all new silver production results as a by-product of producing base metals (as opposed to being created directly from the ground). Therefore, higher prices do not necessarily result in a corresponding increase in new silver production as they would for a gold mine expansion. In addition, demand for solar PVs and EVs continues to grow structurally even though the year-over-year growth rate for that demand varies. Data related to the inflow/outflow of silver-backed ETFs during July indicate that there may be a stabilisation process occurring after a period of instability. By mid-month, both five-day and one-month inflows were slightly positive, although three- and six-month inflows continued to be negative. This indicates that money that was taken out of the market during June is beginning to slowly re-enter the market.
Similar to June, there was no evidence of central bank purchases of silver specifically. Central banks buy only gold, and therefore it is necessary to clearly state that central bank purchases of silver are not a factor. A more relevant trend for silver during July was a general shift in risk sentiment that contributed to gold's ETF rebound. Reportedly, a mid-month decline in tech equities caused some investors to diversify into precious metals in general. In addition to a general shift in risk sentiment, a structural deficit continued to exist.
The Silver Institute estimated that there would be a 46.3 million-ounce shortfall in silver production for 2026. The Silver Institute did not update their estimate in July. With approximately 59-61 percent of total silver demand being consumed by industrial applications (solar, EVs, etc.), and not by investment purposes, the economic factors affecting silver are far less sensitive to fluctuations in ETF flow data than those affecting gold. Disclaimer: There is no monthly Silver Institute report that provides exact tonnage numbers for ETF flows like the World Gold Council does for gold. As a result, silver's investment demand picture each month is based more on qualitative assessments than quantitative assessments.
What is there to look out for next month?
In the lead-up to August, the one thing we can say for sure is that there is an Autumn Budget scheduled for October 28th; however, the Autumn Budget does not represent a direct catalyst for precious metals prices, rather it provides a backdrop to the UK's overall fiscal policy which affects both sterling and subsequently GBP priced gold and silver. As such, investors should continue to monitor the upcoming Federal Reserve meeting in September and any additional economic data released by the United States that may alter the probability of a rate cut or increase.
Additionally, the ongoing ceasefire in the Middle East remains intact at this time; however, this same conflict caused gold to fluctuate significantly during July (one time causing it to fall off, and another time pushing it up), and although there has been a temporary pause in fighting, this conflict has not ended.
Finally, as far as structural changes are concerned, the World Gold Council's next monthly level central bank data (which is usually delayed and published sometime in September) will provide insight into whether central bank purchases of gold continued to occur at a record-setting pace in July compared to Q2 when central banks bought a total of 289 tons of gold, or if most of those purchases occurred earlier in Q2, i.e., during April and May.
My outlook
Recalling from the previous issue, I believe my hypothesis (that both gold and silver are currently undervalued based on) is still valid for gold and especially for silver. My rationale is that: (1) the gold/silver ratio is stretched; (2) there will continue to be a structural shortage of silver; (3) central banks have purchased approximately twice as much gold each year since 2022 compared to their pre-2022 rate of purchase for each of the past four years.
Does July confirm or refute my hypothesis? To a degree, yes, arguably more so. Although the gold/silver ratio did not correct in July and instead pushed to a new quarterly high of 69.48, my assertion that silver is relatively inexpensive to gold became stronger, not weaker, as both metals experienced a recovery in dollar terms. The second part of my hypothesis (central bank purchasing) was further supported by the Q2 World Gold Council (WGC) data. The WGC reported the largest amount of gold purchased by central banks on record for Q2. Both Poland and China continued to accelerate their purchases of gold instead of slowing down. Nothing has changed regarding the supply side of silver either. It will take more than one quarter to eliminate the deficit in silver supply. Also, the by-product mining method used to produce silver means that even if the price of silver increases substantially in July, it will be quite some time before additional silver reaches the market.
If I were honest about my own work, I would say that the only thing that makes me hesitant is that the gold/silver ratio has stayed high for two consecutive months. This leads me to wonder if "stretched compared to history" is still the appropriate way to view the relationship between the two metals, or if something else fundamentally different has occurred in the way that the market values these two metals relative to each other. For example, it is possible that there is now a great deal of demand for gold as a safe-haven asset due to the fact that this year's rally has been driven almost entirely by central bank and institutional purchases of gold rather than retail investors buying silver. While I do not believe this explains why the ratio is at 69x, I recognise that it is a potential threat to my hypothesis that needs to be monitored and tracked rather than disregarded.
Final comments
July was a recovering month with some setbacks; both gold and silver finished the month higher than they started it, the gold/silver ratio reached a new all-time high, which means that despite being a good month for silver in terms of its price performance, its relative performance was still lagging behind gold.
A volatile mid-month decline was followed by a late-month rebound due to relief from the Federal Reserve and decreased tensions in the Middle East. Record central bank gold purchases in Q2 continued to support the underlying bullish trend for both metals. The premise I had made at the end of last month's report, that both gold and silver (but especially silver) are still undervalued, was supported by July's data, although the continued high level of the gold/silver ratio will be something to monitor closely throughout August.
Sources
Bank of England July 2026 Monetary Policy Summary and Minutes
Silver Institute 2026 deficit forecast
World Gold Council Gold Demand Trends Q2 2026
World Gold Council Gold ETF Flows: June 2026