Gold and Silver Are Falling Right Now — Even Though Inflation Fears Are Rising. Here's Why?

It sounds backwards. When inflation fears go up, gold and silver are supposed to be the "safe haven." So why are both falling right now?

Here's the chain reaction:

▪️Geopolitical trigger — the US launched airstrikes against Iran after attacks on merchant ships near the Strait of Hormuz.

▪️ Oil prices spiked — supply fears pushed crude prices sharply higher.

▪️Inflation fears reignited — May's CPI was already at 4.2%, the highest since 2023, driven largely by energy costs.

▪️The Fed turned hawkish — new Fed Chair Kevin Warsh dropped the easing bias, and nearly half of Fed officials are now projecting a rate hike this year instead of a cut.

▪️Result: gold and silver fell — silver dropped below $60, trading near $59.

Copyrighted By: Financemagnates

The lesson: gold and silver aren't automatic inflation hedges. What actually moves them is the direction of interest rates. When the market expects higher rates ahead (even during high inflation), non-interest-bearing assets like gold and silver lose their appeal — because cash and bonds start paying more.
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