Precious metals steady as oil-driven inflation fears fade

Central banks remain committed buyers

The World Gold Council’s 2026 Central Bank Gold Reserves survey once again highlighted the continued importance of gold as a strategic reserve asset. An overwhelming 89% of respondents expect global central bank gold holdings to increase over the coming year, while a record 45% expect their own institution to add to reserves. At the same time, 74% expect the share of US dollar holdings within global reserves to decline over the next five years, while gold’s share is expected to rise.

The reasons remain familiar. Gold continues to be valued given its diversification benefits and despite the recent drop its ability to hedge long-term inflation trends. However, geopolitical risk management and reserve diversification away from traditional reserve currencies are increasingly becoming key motivations for purchases. Taken together, the survey supports the view that central banks remain structural buyers of gold even after several years of record accumulation.

Asked the question, how do you expect your institution’s gold reserves to change over the next 12 months, 45% answered it would rise with EMDE banks continuing to lead their advanced economy counterparts when it comes to building gold reserves.

Technical damage but the long-term trend survives

From a technical perspective, gold currently trades broadly unchanged on the year after suffering a 23% correction from the January record high. While the sell-off appeared dramatic, it has so far only inflicted what technicians would describe as a relatively mild correction within a powerful long-term uptrend. Using the rally from the 2022 low to this year’s peak as a reference, gold found support below USD 4,100 after retracing just 38.2% of that advance, highlighting the resilience of underlying demand despite aggressive liquidation from leveraged traders.

The key challenge now remains the 200-day moving average, currently near USD 4,458, which has turned into resistance following the recent breakdown. A sustained move back above that level may in our opinion strengthen the argument that the correction has largely run its course.

Silver and platinum follow a similar but more volatile path

Silver and platinum have meanwhile followed a similar path to gold albeit with the added volatility lower volume metals offer. Silver remains supported by a structurally tight market, but recent developments in India have highlighted the risks posed by elevated prices. Indian silver imports plunged 87% year-on-year in May and fell to the lowest level in more than three years after authorities tightened restrictions and import controls while high prices dampened demand. In volume terms, imports dropped 94% to just 33 tonnes. While the longer-term outlook remains supported by persistent supply deficits and industrial demand linked to electrification and energy transition themes, the latest figures demonstrate that demand destruction becomes an increasing risk as prices move higher.

Platinum has experienced an even more volatile correction. Weaker liquidity combined with concerns about global economic growth and industrial demand helped drive a sell-off that came close to derailing the broader bull trend. Whereas gold held support after retracing 38.2% of its multi-year advance, platinum suffered a much deeper 61.8% retracement during last week’s capitulation event across precious metals and the broader PGM sector.

The subsequent rebound has shifted focus towards several important technical hurdles. Initial resistance is found around USD 1,870, the recent breakdown zone ahead of the 200-day moving average near USD 1,911. Much like gold, platinum’s ability to reclaim and hold above this level may determine whether the current rebound develops into a more sustained recovery or merely proves to be a temporary relief rally.

Focus may shift back to long-term structural drivers

For now, the precious metals sector appears to be moving beyond the inflation shock that dominated trading over the past several weeks, but reclaiming key technical levels will be necessary before investors can confidently try call an end to the month-long slump. However, as energy prices retreat and rate hike expectations moderate, investors may increasingly return their attention to the structural themes that have supported hard assets in recent years: central bank reserve diversification, fiscal concerns, geopolitical uncertainty and the ongoing search for stores of value outside traditional fiat currencies.