Happy Tuesday, GoldBuzzers!

The real driver of gold’s weakness at the moment isn’t even on the gold chart at all. It’s a number that just hit a 13-month high, and it’s quietly suppressing the price of every ounce.

Today, I’m looking at what it is, what would have to change for metals to get some relief, and why two of the loudest bulls in the space just went quiet.

️Let’s get into it. ⬇️

Gold and silver clawed back ground on Monday after last week's slide. Gold recovered to around $4,190 an ounce, up close to 1 percent on the day after touching its weakest level since June 11. Silver did a little better in percentage terms, climbing back above $65 and adding roughly 1.3 percent.

The trigger was oil. Reports that the US and Iran had agreed on a 60-day roadmap toward a peace deal, reached in talks in Switzerland, pushed crude lower and took some heat out of the inflation story that has weighed on metals all month. Tehran had claimed it closed the Strait of Hormuz, but tankers kept moving through the waterway over the weekend and Gulf producers are lining up to pump more.

The bounce is worth keeping in perspective. Gold is still down about 8 percent over the past month and silver about 16 percent, even though both sit far above where they traded a year ago.

The rest of the week turns on inflation data. The Fed's preferred gauge, the PCE price index, lands in the next few days, and last week's hawkish hold left nine of the Fed's 19 policymakers expecting at least one rate increase this year, with futures now leaning toward a hike before year-end.

The U.S. dollar index climbed to about 101 this week. That’s its highest reading in 13 months, and it puts the dollar firmly back above the 100 line it had spent months underneath.

Over the past month the index is up close to 1.8 percent. The 10-year Treasury yield rose with it, touching around 4.5 percent, its highest in about two weeks. When those two lines climb together, they explain most of what is happening to metals.

The mechanics here are old and reliable. A stronger dollar makes gold and silver more expensive for anyone buying in euros, yen, or pounds, which cools demand. Higher yields raise the cost of holding something that pays you nothing to own, so when Treasurys offer a real return, money drifts out of metal and into bonds. None of that needs a story about gold. The denominator moved, and the metal looks weaker as a result.

What moved the dollar was last week's Federal Reserve meeting. The Fed held its policy rate at 3.50 to 3.75 percent on June 17, but the message changed. Nine of the 19 policymakers now expect at least one rate increase before the end of the year, and the Fed lifted its inflation forecasts. Traders took the hint. Futures now put the odds of a September hike near 50 percent and are close to fully pricing one by October. The rate-cut bets that helped carry gold earlier in the year have mostly gone. A reported US-Iran roadmap and falling oil prices pulled some of the safe-haven bid out at the same time.

Before reading too much into the selloff, put it next to where gold came from. The metal set a record high of $5,589 on January 28. It has fallen hard since, down roughly 8 percent in the past month, with $4,170 holding as the recent floor. A move like that looks alarming on a daily chart. It is also the kind of pullback that tends to follow a year in which gold gained more than 60 percent. Gold is handing back part of a historic run, not erasing the reasons people bought it.

Those reasons are mostly intact. Central banks added 244 tonnes in the first quarter and have kept buying even at record prices, and government debt keeps rising. What changed is short-term pricing power, and at the moment the dollar holds it.

So the chart to watch is the dollar's, not gold's. A break back below 100 on the index, a soft reading in Thursday's PCE inflation report, or any sign the Fed is easing off its hawkish lean would take pressure off metals fast. The opposite is also true. If U.S. data stays firm and inflation runs hot, the dollar keeps its grip and gold keeps grinding lower.

There is a sentiment signal worth watching too. Two of the most consistently bullish voices in precious metals have pulled back at the same time. Gary Savage has scaled back his public commentary and paused new subscriptions to his newsletter, and Michael Oliver has stepped away from regular X posting until year-end. These are analysts who charge up to $1,800 a year and have called for multi-thousand-dollar gold and multi-hundred-dollar silver for years. When the loudest optimists go quiet during a 25 percent drop from the peak, it reads as extreme fatigue setting into the bull camp.

That is not the bearish tell it might look like. Oliver paired his break with a forecast for new highs by December, and washed-out sentiment among longtime believers has more often turned up near lows than near highs. The mood is grim, which tends to be how the back end of a correction feels rather than the start of one, but all eyes are on the dollar index this week.

That’s all for this Tuesday, folks. I’ll see you on Thursday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com