Happy Sunday, GoldBuzzers!

Gold and silver have spent the month going backward, and this week Goldman Sachs trimmed its year-end target to match. Strip out the noise and two things are happening at once.

The price is correcting, and the central banks are still buying. Today's Deep Dive is about the gap between those two facts.

Let’s get into it. ⬇️

Gold closed Friday near $4,156 an ounce, its weakest level since June 11 and a third straight weekly loss. Silver fell harder, dropping below $65 for a weekly loss of about 4.5 percent. Both moves trace back to the Fed.

The central bank held rates steady this week but turned more hawkish, and the dollar climbed to a one-year high. Nine of the 19 policymakers now expect at least one rate hike before year-end, and markets are pricing in roughly a 70 percent chance of an increase by September.

Higher rates for longer support the dollar and weigh on metals that pay no yield. Goldman Sachs piled on, cutting its year-end gold target to $4,900 from $5,400. Geopolitics gave no cover either. Switzerland confirmed the planned US-Iran talks had been cancelled on Friday, so the Middle East risk stayed in place without lifting prices.

Gold and silver have spent this month going backward. Gold trades near $4,165, down roughly a quarter from its late-January record near $5,600. Silver has been hit harder, off more than 40 percent from its January high above $121. The headlines followed the price down, and this week one of the loudest bulls on Wall Street trimmed its call.

Goldman Sachs cut its year-end 2026 gold target by $500 on Friday, to $4,900 from $5,400. The bank pushed its final two expected Fed rate cuts out to June and December of 2027.

Make of that what you will, but remember that banks tend to follow, not to lead. They increase their forecasts when prices are rising and lower them when prices are falling.

Traders have gone further than that. Futures pricing now leans toward rate hikes before year-end rather than cuts. Rates that stay higher for longer raise the cost of holding metals that pay no yield, a firmer dollar adds to the pressure, and progress toward a US-Iran agreement has pulled some of the safe-haven bid out of the market.

Asia's physical market tells the same story. Gold fell to its lowest in two and a half months, and buyers stepped back. Indian dealers widened discounts to as much as $54 an ounce over official domestic prices this week, up from $35 the week before. China flipped to a discount for the first time since late December. When local buyers wait for a clearer trend, the physical floor under the price gets thinner.

None of that is trivial. When a major bank cuts its forecast and physical premiums turn to discounts, it means the near-term pressure is very real. Volatility scares off new buyers and accelerates profit-taking in ETFs. Gold and silver do not move in a straight line, even in a bull market that is years old now.

The price action also hides something. Both metals have given back their 2026 gains and sit roughly where they started the year. Gold is still about 30 percent above where it traded a year ago. This correction has taken off the froth, not the trend.

Underneath the noise, the slower demand has not let up. Central banks bought more than 800 tonnes of gold last year, with 2026 tracking in the same range and well above the average of the past decade. More telling is where they are putting it.

The World Gold Council's reserve survey, out June 16, found the share of central banks storing gold at the Bank of England fell to 57 percent from 64 percent a year earlier. The share at the New York Fed dropped to 14 percent from 17 percent. France moved 129 tonnes home from New York between July and January, and political pressure is building in Germany to do the same with the 1,236 tonnes it still holds there.

This is sticky buying. It runs on a different clock than a quarterly forecast or a rate-path revision. When a country pulls its gold onto home soil, it is making a long decision about trust rather than placing a trade. That takes metal out of the pool available for leasing and paper trading, and it points toward a more divided monetary world.

Silver carries a second job. It feels the same macro pressure as gold, but its industrial demand in solar, electronics, and EVs gives it a floor gold does not have, and a sixth straight year of supply deficit sits underneath it.

That cuts both ways. Silver fell harder on the way down, and it tends to move harder on the way back up.

A few things I will be watching this week: Fed communication and any surprise in the inflation or jobs data that shifts the rate path, central bank buying and the repatriation flows that rarely make headlines, the US-Iran situation and its read-through to energy prices, and whether Asian physical demand returns once the price stops lurching.

The nearest test comes Thursday. The May PCE report lands then, the Fed's preferred inflation gauge, and it runs straight into the rate path that has been pushing these metals around. We should know a lot more by the end of the week whether gold and silver are ready to turn higher or whether lower prices come first. A hot reading keeps the pressure on. A soft one will give the rally room to start.

The near-term pressure is loud and well documented. The demand underneath it is quieter, and it has not reversed.

That’s all for this Sunday, folks. See you on Tuesday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com