Happy Sunday, GoldBuzzers!

Gold around $4,000, silver under $60, red on every screen. Before you read the doom takes, look at what the central banks and the Asian clearing desks actually did this month.

In today's Deep Dive, I’ll be analyzing the gap between those two pictures, to find out which matters more once the dust settles.

Let’s get into it. ⬇️

Gold and silver both fell again this week as the Federal Reserve signaled it wants to keep interest rates high, and may even raise them, to get inflation down. That tends to lift the US dollar and makes gold and silver less appealing, since neither pays interest.

Gold dipped below $4,000 on Wednesday for the first time since November before recovering to about $4,080 by close on Friday, still down around 3 percent on the week and lower for a fourth week running. Silver fell harder, sliding under $57 midweek before climbing back above $58, ending down close to 10 percent.

New Fed Chair Kevin Warsh stuck to his message on fighting inflation, and markets now expect at least one rate increase before the year is out. Silver keeps lagging gold because it’s also an industrial metal, so it gets knocked harder whenever the economy looks shaky.

Gold and silver have taken a beating these past few weeks. Gold slipped below $4,000 on June 24 for the first time since November, ending the day near $3,976 and roughly 28 percent under the $5,589 record it set in late January. Silver dropped under $60 for the first time since December, and at its worst this year it had shed more than 45 percent from its January high above $121.

The usual suspects get the blame: the continuing rhetoric that the Iran war is “almost over”, the US dollar at a 13-month high, firmer real yields, and a hawkish first meeting from new Fed chair Kevin Warsh, who withheld his own rate projection and let the committee's lean toward higher-for-longer carry the message. Oil has come off hard as well, down from above $120 at the peak of the Iran conflict to the high $70s once a ceasefire reopened the Strait of Hormuz, and that drop has pulled some of the inflation fear out of the market.

So the screen looks ugly. Underneath it, the data shows that something else is going on.

The selling has been concentrated in leveraged money, not in the metal.

When prices ran in January and February, banks and exchanges pushed margins up to choke off the speculation, and they have kept pushing. In early June, ICBC, China Construction Bank, Agricultural Bank of China and Bank of Communications raised the margin on personal deferred precious-metals contracts on the Shanghai Gold Exchange to 120 percent, taking leverage below one to one. Bank of China and China CITIC went to 140 percent.

On June 24, ICBC said it would stop acting as agent for individual margin trading on the exchange entirely from July 24, and several other lenders are walking toward the same door. The CME has tightened silver in much the same way. What that produces is forced selling from accounts that borrowed to get in, and it is not the first round. Each one clears out a few more weak hands.

While that runs its course, the official sector keeps buying as though the sell-off were happening somewhere else. The World Gold Council's 2026 reserves survey, published June 16, drew 76 central-bank responses, the most in the survey's nine-year history.

Central banks have added gold at roughly 1,000 tonnes a year over the past four years, double the pace of the prior decade. Eighty-nine percent of respondents expect global reserves to keep rising, and a record 45 percent plan to add to their own.

The buying sits alongside a build-out in Asia's plumbing. Hong Kong launches a government-owned gold-clearing system in July, run through the Hong Kong Precious Metals Central Clearing Company and built with the Shanghai Gold Exchange.

It settles through unallocated accounts and handles physical delivery, and at least four of the eleven member banks are already shipping 400-ounce London Good Delivery bars into the city to stock it.

China's gold imports hit about 163 tonnes in the latest month, the most since March 2024, with the first five months of the year running roughly 76 percent ahead of last year.

The aim is to deepen Asian liquidity and lean less on Western price benchmarks in a region that already does most of the world's physical buying.

Silver tells the same story in sharper relief. The price swings have been wilder, but supply has not budged: the market has run annual deficits for years, with industrial demand stacked on top of monetary demand. The correction trimmed some premiums in Shanghai. It did nothing to the gap between mine output and what the world actually wants.

In my view, that’s the divergence to look at. Leverage is being stripped out at one end while central banks and Asian clearing networks add capacity and take delivery at the other.

The metal isn’t vanishing. It’s moving from hands that can be margin-called to hands that cannot, and the record on official buying, import flows and clearing build-outs shows where it’s going.

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

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com