Precious Metals News & Analysis - Gold News, Silver News from Money Metals Exchange

Silver’s New Era: Supply Deficits Meet Exploding Industrial Demand

Sat, 15 Aug 2026 00:00:00 EST

Silver has experienced a wild ride in 2026, but https://share.google/t1jQHFouVbK8UwRUG"; target="_blank" rel="noopener">The Silver Institute President and CEO Michael DiRienzo says investors shouldn’t let the volatility obscure a much bigger story: the underlying silver market remains remarkably strong.

DiRienzo joined Money Metals podcast host Mike Maharrey to discuss silver’s dramatic price swings, persistent supply deficits, industrial demand, solar energy, artificial intelligence, investment flows, and the metal’s expanding role in medicine.

His central message was straightforward. Silver is no longer the $13 or $15 metal investors remember from less than a decade ago. In DiRienzo’s view, the market has established substantially higher floors because silver is increasingly being valued for both its industrial utility and its investment potential.

(Interview Starts Around 7:21 Mark)

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From $121 Silver Back to $65

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Silver surged to roughly https://www.moneymetals.com/silver-price";>$121 an ounce on January 29, 2026, before falling sharply alongside gold. By the morning of Maharrey’s interview with DiRienzo, silver was trading around $65 per ounce.

DiRienzo said the late-February outbreak of war in Iran put additional pressure on precious metals. Interestingly, he noted that gold and silver have tended to respond positively to announcements involving ceasefires or the reopening of the straits, suggesting the conflict has been weighing on the precious metals complex rather than providing the traditional geopolitical boost investors might expect.

But underneath the geopolitical turmoil, DiRienzo sees strong fundamentals.

He noted that just two years ago, predicting an average 2026 silver price above $72 to $75 per ounce would have sounded extraordinary. Yet the market has reached precisely that neighborhood this year.

Mining companies have also benefited substantially from higher prices. DiRienzo said second-quarter figures being reported by mining companies were broadly positive, including among Silver Institute members producing silver both as a primary product and as a byproduct.

Industrial Demand Remains a Powerful Force

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Industrial demand remains one of the most important pillars supporting silver.

https://silverinstitute.org/"; target="_blank" rel="noopener">The Silver Institute expects a small decline in industrial demand this year, driven in part by reduced silver consumption in photovoltaics. With silver prices elevated, solar manufacturers have an obvious incentive to reduce the amount of silver they use or substitute another material.

Doing so, however, isn't simple.

Silver has the highest electrical conductivity of any metal, and the process of screen-printing silver paste onto solar cells is already mature and highly efficient. Alternative materials and metallization technologies still face hurdles before they can compete with silver at scale.

Copper metallization exists, for example, but DiRienzo said it has yet to scale sufficiently to replace silver across the solar industry. For solar farms designed to operate for 25 years, manufacturers also have to consider silver's reliability, durability, and stability rather than simply its upfront cost.

Solar’s Silver Appetite Has Exploded

The scale of silver consumption in solar has changed dramatically over the past decade.

DiRienzo said solar represented about 11% of total silver industrial demand in 2014. By 2024, its share had climbed to just under 30%, marking the peak year for silver consumption in solar to date.

The industry is now attempting to engineer some silver out of its cells as prices rise. But manufacturers were already trying to reduce silver consumption when the metal traded for only $13 per ounce.

As DiRienzo explained, manufacturers relentlessly pursue even tiny savings. Reducing costs by two, three, or four cents per solar cell can matter when production is measured in enormous volumes.

That means efforts to thrift silver will continue. But DiRienzo doesn't foresee silver disappearing from photovoltaics the way photographic demand largely disappeared with the transition to digital photography.

AI Could Become Another Major Silver Demand Driver

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Artificial intelligence represents another potentially significant source of future silver demand.

The AI boom requires an enormous physical infrastructure of data centers filled with electrical contacts, wiring, and other components that can use silver.

DiRienzo said data centers have grown by more than 6,000% in just three years. The Silver Institute has already examined silver's role in AI data centers and other emerging technologies in a report on silver as a “next generation metal.”

The precise amount of silver being consumed by AI infrastructure remains difficult to quantify. DiRienzo acknowledged that the Institute is hearing about increased consumption but doesn't yet have firm numbers.

The direction, however, appears clear to him. With AI infrastructure still in its infancy and data-center installations expanding around the world, DiRienzo expects silver demand from this sector to increase.

Higher Gold Prices Are Also Affecting Jewelry

Silver may also be benefiting indirectly from gold's elevated price.

DiRienzo pointed to examples of jewelry made primarily from silver and then plated with gold, providing the appearance of gold while using silver as the underlying metal.

Jewelry demand remains highly price-sensitive because it is fundamentally a discretionary purchase. DiRienzo also highlighted an interesting demographic trend: more women between the ages of 24 and 30 are buying silver jewelry globally.

The Silver Institute expects overall silver jewelry demand this year to remain relatively consistent with last year's level.

Higher Prices Can't Quickly Produce More Silver

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The supply side of the market presents a very different challenge.

A silver miner can't simply flip a switch and dramatically increase production because prices have risen. DiRienzo noted that some of the mining taking place today traces back to plans made 10 years ago, in 2016.

Mining companies are spending more on exploration, but DiRienzo said they aren't doing so recklessly. Much of the activity appears concentrated around existing projects as companies search for additional or previously unidentified veins.

That means substantially higher silver prices aren't necessarily going to unleash a flood of new supply anytime soon.

Mine production increased about 3% in 2025, but the Silver Institute expects production to decline 0.3% in 2026.

A Sixth Consecutive Silver Market Deficit

The supply constraint becomes particularly important when considered alongside persistent demand.

The Silver Institute expects the silver market to record its sixth consecutive annual structural deficit in 2026. DiRienzo estimated the shortfall at roughly 46 million to 50 million ounces, although it could become larger if demand strengthens.

Recycling will help. The Institute expects recycled silver supply to increase by roughly 7% this year.

It still won't be enough.

Even after incorporating recycling into total supply, DiRienzo expects demand to exceed supply again in 2026.

A market deficit doesn't mean the world has literally run out of silver. It means annual demand is exceeding annual newly available supply, forcing the market to draw on above-ground inventories.

And those inventories aren't necessarily as freely available as headline figures might suggest.

The Silver Sitting in Vaults Isn't Necessarily Available

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DiRienzo used London inventories to illustrate the problem.

Suppose London Bullion Market Association vaults contain approximately 750 million ounces of silver. That sounds like an enormous stockpile.

But DiRienzo estimated that roughly 75% of that silver is already allocated to exchange-traded products around the world.

That leaves a much smaller pool of readily available metal — and accessing that remaining “free float” can be extremely price sensitive.

The consequences became apparent when tariff concerns caused silver to move from London and elsewhere into New York ahead of the April 2, 2025, “Liberation Day” tariff announcement.

Precious metals ultimately weren't included in the tariffs, but the episode demonstrated how quickly physical metal can move when market participants anticipate disruptions.

Maharrey pointed to another example closer to home: Money Metals was shipping 1,000-ounce silver bars to India during the tight market around Diwali.

DiRienzo recalled the episode and noted that silver lease rates subsequently surged as the market became extremely tight.

Could similar silver squeezes happen again?

“Absolutely,” DiRienzo said. “No question about it.”

Silver Investment Demand Could Strengthen

The Silver Institute also expects stronger retail investment demand for physical silver.

DiRienzo said demand for silver coins and bars could increase approximately 7% in 2026, despite challenges involving Indian import duties. India has been an especially strong market for silver bars and coins over the past several years.

Exchange-traded products tell another part of the investment story.

Silver ETPs recorded net inflows of approximately 270 million ounces in 2025. The outbreak of war subsequently contributed to liquidations in gold and silver ETPs, with DiRienzo saying silver had experienced outflows of roughly 6% this year.

He added that the Silver Institute was hearing that investment activity was beginning to pick up again.

Medicine Shows Another Side of Silver

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When Maharrey asked DiRienzo to name one of silver's lesser-known applications that he finds particularly interesting, DiRienzo pointed to health and medicine.

Silver's antibacterial properties give it uses throughout healthcare environments. DiRienzo cited silver coatings in operating rooms and on operating tables and instruments, along with silver incorporated into hospital drapes and used alongside cleaning agents.

He also highlighted emerging nanotechnology. The Silver Institute's August edition of Silver News was set to examine how nanosilver can help doctors administer the correct drug dosage.

Silver's antibacterial properties extend beyond hospitals. DiRienzo also cited water purification, pools, and efforts to combat outbreaks of Legionnaires' disease. In these applications, silver can help prevent infection and promote healing.

These applications may represent relatively small amounts of silver compared with solar panels, electronics, or investment products, but they demonstrate just how broad the metal's usefulness has become.

From $15 to More Than $70

Perhaps the most striking way to understand today's silver market is simply to look backward.

During the interview, DiRienzo opened the World Silver Survey and read off a series of historical average prices.

Silver averaged $17.05 per ounce in 2017. It subsequently averaged $15.71, followed by $16.21 in 2019. By 2023, the average had risen to $23.35, followed by $28.27 in 2024 and approximately $40 in 2025.

In 2026, DiRienzo said the market is talking about an average above $70 per ounce.

That longer-term perspective matters after silver's retreat from its January peak.

At around $65 an ounce during the interview, silver was dramatically below its $121 high. But Maharrey emphasized that it wasn't very long ago that investors were accustomed to silver trading for $13, $14, or $15.

DiRienzo believes the difference reflects a fundamental change in the market.

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“We think new floors have been set in the market,” he said. Silver, in his assessment, is now trading on the strength of both its industrial applications and its investment appeal.

A Tight Market With Powerful Long-Term Drivers

Silver's 2026 correction may dominate short-term investor psychology, but the fundamentals DiRienzo described point toward a much larger story.

The market is heading toward a sixth consecutive structural deficit. Mine production is expected to decline slightly. Recycling is increasing, but not enough to close the gap. Physical investment demand could rise 7%. Solar still consumes enormous amounts of silver despite ongoing thrift efforts. AI infrastructure presents another rapidly growing source of potential demand.

Meanwhile, much of the silver sitting above ground isn't necessarily freely available to the market.

DiRienzo believes 2026 is shaping up to be a remarkable year for the metal. He expects the annual average silver price to set a record, and he sees evidence that the market has established price floors far above those of the previous decade.

Silver may still be volatile. But in DiRienzo's view, today's silver market is fundamentally different from the one investors knew when the metal traded in the teens.

And those fundamentals — industrial demand on one side and investment demand on the other — could https://www.moneymetals.com/news/2026/08/10/gold-silver-showing-renewed-momentum-005128";>continue defining the silver market long after the geopolitical turbulence of 2026 has passed.

Gold Tops $4,400, Silver Surges — And Sound Money Scores New Victories

Fri, 14 Aug 2026 00:00:00 EST

Welcome to this week’s market wrap podcast, I’m Mike Gleason

Coming up don’t miss our exclusive interview with Michael DiRienzo, President and CEO of The Silver Institute. Mr. DiRienzo provides an update on how things look when it comes to the industrial demand side of things for silver, and how the years-long structural supply deficit is likely going to continue to be a factor worth watching as we move forward here in the silver market. Our guest also hints at when his firm believes we may see a new high in the silver price, a time horizon which may surprise you.

So, be sure to stick around for another wonderful Money Metals interview with our own Mike Maharrey and Michael DiRienzo of The Silver Institute, coming up after this week’s market update. And if you enjoy this material, please do us a favor and like and subscribe to this podcast wherever you consume this content.

Gold and silver are finishing out another volatile week with both metals moving higher Friday morning, as investors digest softer inflation numbers, a weakening U.S. dollar, and growing evidence that the Federal Reserve may be able to stay on the sidelines.

The big driver this week has been inflation.

July's Consumer Price Index rose just 0.1 percent for the month, while the Producer Price Index came in flat. Those relatively benign numbers helped ease fears that inflation was about to force the Fed into another round of tightening.

That sent gold surging to a two-month high above $4,400 an ounce earlier this week before profit-taking knocked prices back on Thursday. Gold dropped more than one percent during that session, but buyers quickly returned on Friday as the dollar weakened.

The market has now substantially reduced the odds of a September Fed rate hike. Reuters reports that those odds have fallen to roughly 31 percent, versus 55 percent just a week ago. That's a meaningful shift in expectations, and it's generally supportive for precious metals.

Silver, meanwhile, continues to be the more explosive of the two metals.

After briefly pushing above $67 an ounce following the CPI report, silver pulled back toward $64 before rebounding here on Friday. Even after that volatility, silver remains up roughly 13 percent over the past month and more than 70 percent from a year ago.

But perhaps the most interesting development isn't the daily price action at all.

Central banks continue accumulating gold as they diversify reserves away from traditional government debt and the dollar. Reuters noted this week that central-bank buying remains an important force behind the renewed gold rally.

And there is an interesting contradiction developing in the bond market. Inflation is cooling in the short run, but investors remain nervous about enormous government deficits and the long-term purchasing power of government debt. A Treasury auction this week produced the highest 30-year yield in 25 years.

That combination may ultimately be the bigger story for gold.

Markets can debate whether the Fed hikes, cuts, or stands pat at its next meeting. But Washington's debt continues growing regardless.

And that fundamental case for owning sound money hasn't changed.

As for the specifics of the weekly price action, gold is up back up above $4,400 – at least as of this moment. The yellow metal currently checks in at $4,402, good for a weekly gain of around $50 or 1.1%.

Silver is following up last week’s explosive double-digit percent gain with another 2.1% advance here this week. The white metal is up nearly $1.50 and checks in at $65.64 an ounce.

Platinum is little changed this week and comes in at $1,754, but its sister metal palladium is taking it on the chin a bit. The industrial metal is off $60 or 4.3% since last Friday’s close.

Well, before we move to this week's special interview, I want to highlight some important progress on the public-policy front – because Money Metals doesn't just buy, sell, store, and lend against precious metals – we’re also working to promote legislation that benefits gold and silver investors, and our nation as a whole.

This week, Money Metals and our partners at the Sound Money Defense League named three state lawmakers as the 2026 Sound Money Legislators of the Year: Maryland Delegate Wayne Hartman, Maryland Senator J.B. Jennings, and Alaska Representative Kevin McCabe.

These aren't merely symbolic awards. They recognize legislators who delivered tangible victories for precious metals owners.

In Maryland, Hartman and Jennings led the successful effort to restore the state's sales-tax exemption on precious metals after lawmakers effectively eliminated it in 2025. The consequences of that tax were dramatic. Maryland coin and bullion dealers testified that some lost more than 70 percent of their business almost overnight, as customers simply took their purchases elsewhere.

The Sound Money Defense League worked directly with legislators on the bill language, supplied research and talking points, mobilized thousands of Maryland citizens, and even testified in Annapolis. The result was a reversal of a damaging policy and a significant victory for Maryland investors and businesses.

Meanwhile, in Alaska, Representative Kevin McCabe spent years working with the Sound Money Defense League to enact House Bill 1. The new law prevents local governments from imposing sales taxes on gold and silver coins, bars, and rounds – and it reaffirms gold and silver's status as constitutional money.

And this is part of a much bigger effort.

Money Metals has been working for years to advance pro-sound-money legislation state by state – eliminating discriminatory taxes on precious metals, recognizing gold and silver as money, promoting the creation of state gold reserves, and removing legal barriers to owning and using precious metals.

Today, 45 states have fully or partially eliminated sales taxes on purchases of precious metals. Just five states still impose sales taxes on all such purchases: Washington, Hawaii, New Mexico, Maine, and Vermont. Those states are increasingly becoming the exceptions rather than the rule.

So, while we spend plenty of time discussing the gold and silver markets, we're equally proud of the work happening behind the scenes.

Sound money isn't just an investment idea. It's a policy agenda – and Money Metals intends to keep leading the fight to advance it.

Well now, without further delay, let’s get right to our exclusive interview with a silver market insider.

Mike Maharrey: Greetings. I'm Mike Maharrey, and I'm joined today by Michael DiRienzo. Michael is the president and CEO of the Silver Institute and a fine human being to boot. How are you doing today, Michael?

Michael DiRienzo: Hey, I'm doing great, Mike. Thank you again for the opportunity and I follow your work closely and you put out some really great reports, so thank you for that.

Mike Maharrey: Well, I really appreciate that. And I could not do my job if you guys weren't doing your job. We depend so much on the data and the kind of boots on the ground in-depth analysis that you folks put out on a weekly and monthly basis. So thank you for everything that you do. It's been a while since we've talked, so I'm really interested to get your perspective on where we've been and where we're going. Of course, we saw a silver surge to just over $120 an ounce in early January and then corrected. And I think that correction was warranted, just got a little frothy there for a bit. And then we kind of rode all the way down into the $50 announce for a while. Now we seem to be kind of recovering along with gold. And we're running around $65 an ounce this morning as we're recording this interview.

And I think to some degree silver followed gold lower. But I guess setting aside those things that are impacting the overall market, talking about the Iran-US conflict and interest rate expectations and stuff for that, but looking more, just focusing on the dynamics in the silver market, looking at supply and demand and what we're seeing there, do you kind of feel like the price is settled in about where it should be given those dynamics? And just how do you see the overall market right now? Where are we compared to where we've been and maybe where are we going?

Michael DiRienzo: Sure. Well, thank you. Yeah, look, as you mentioned, we got to $121 and January 31st of this year. It came down quite precipitously along with gold. It was not helped at all by the late February announcement of the war in Iran. It took a little more off the top then. And you'll note that I've been noticing that anytime that there's an announcement of a ceasefire or that the straits are open, the precious metals complex reacts positively. So there is no question in my mind, at least, that this war and this global conflict is affecting the market. And it's quite opposite of what we saw in the 1970s. Gold and silver really didn't react to higher inflation in 2021 and 2022. It did modestly, and it's not really reacting the way it used to in times of political uncertainty and more. So what it's trading on today, in the case of silver, are the solid fundamentals of the market.

And if I had told you two years ago that the average silver price in 2026 would be above $72, $75 an ounce, you may have thought I was crazy. But here we are today at around $65 an ounce. Every mining company is reporting in our second quarter figures as we speak. It's all very positive. And I'm happy for our member mining companies that continue to produce silver. Some of it as a byproduct of course, but we do have quite a few primary members and they're doing just fine. So the market right now is we're seeing that industrial demand for silver, that we released this data back in April of this year, and it's pretty much on target. We think there'll be a small decrease in industrial demand, and that will be led by a further decrease in the use of silver in photovoltaics as we go through the remainder of this year.

So at these price levels, you can only imagine that manufacturers are looking to get out of silver and replace it with another metal, but they're having some difficulty doing that. I mean, if you have a 25-year planned solar farm, you're going to want the reliability, the durability, and the stability of silver in those solar cells. And they're finding that out. So, we don't know when this is going to hit its bottom, but we always know, and we will know that silver will be used in PV from here on out. And it's not like photography, which was replaced entirely by digital photography. But it's not just that. I mean, EV sales are going through the roof globally. The AI infrastructure is in its infancy, and the data centers that are needed to power AI are exploding across the globe in terms of their installations. That's win-win for silver down the road and even currently.

So, look at the market, it's tight. We do believe that there'll be an increase on the investment side of investment demand. We think it'll rise by, I'm talking about retail silver investment, coin and bars. That's probably going to go up by about 7% this year, facing some issues in India with some of the import duties. But India has been strong in the last several years with respect to silver bars and silver coins. And we can talk about ETFs a little bit down the road.

Mike Maharrey: Yeah. I'm curious about just maybe some specifics. Thinking about the solar use of silver. I know that obviously when the price of one of your big components goes way up, you're going to look for waste to substitute. I'm curious as to really how realistic is that? What substitute is there and is it that much cheaper and reliable than silver?

Michael DiRienzo: Well, I mean, look, silver has unmatched conductivity as you know. And a lot of these alternatives are immature in their development. Silver has the best electrical conductivity of any metal. And the screen printing silver paste onto cells is a mature high yield process as we speak. Alternative materials and metalization techniques, they still must overcome challenges before becoming really competitive. So copper metalization exists, but hasn't scaled to replace silver industry-wide. There is some structural growth and solar deployment. I think you read probably this year that the IEA expects solar to become the dominant global renewable energy source by 2030. And solar's share of total silver industrial demand rose from 11% in 2014 to just under 30% in 2024, which was the peak year of silver's consumption or use in solar. We reported that there was a decrease last year, that there'll be a decrease this year.

It's not horribly significant, but as these prices have gotten painfully high for these manufacturers, they're actively engineering it out. But Mike, they were doing it when silver was $13 an ounce.

Mike Maharrey: Yeah, no doubt. I mean, you're always looking for a way to save a penny.

Michael DiRienzo: And that's what it is. It's fractions of a penny. It's two, three, four cents per cell, and that's what they're looking to do.

Mike Maharrey: Yeah. Interesting. So obviously, we're seeing this massive build out in AI data centers. Data centers seem to be in the news almost every day. Obviously, a lot of the same electrical kind of components are in AI. Are we seeing a big increase in silver offtake from that build-out?

Michael DiRienzo: Well, we're hearing it, but we just don't have the numbers. We put out a report late last year on silver's use in AI data centers, solar panels and PV, called it the silver, the next generation metal. It is clearly being used. Data centers have grown over 6,000% in just the last three years. And you can only imagine the number of electrical contacts required, the wiring, the pasting that is needed in these facilities. So yes, silver demand will increase in those two applications. There's no question about it.

Mike Maharrey: Yeah. Have you seen some substitution in the jewelry market as gold prices have risen? Have we seen some shift to silver jewelry with that?

Michael DiRienzo: Yeah, it's interesting. We've been reading about, and I've seen firsthand, you're seeing gold plated silver jewelry in some cases. So, silver is the backbone, but there's a sheen of gold plating on top of it. Jewelry demand is obviously quite price sensitive and it's a discretionary purchase by the individual. And more women are buying silver. More women between the ages of 24 and 30 globally are buying silver jewelry. We think that number is going to be pretty consistent with last year's number this year. But as the world economy goes, as people feel that they're more flush in the pocket, there goes silver and gold jewelry purchases.

Mike Maharrey: Right, right. Absolutely. Yeah. Very interesting. So looking at the supply side of the equation, obviously if you're a miner, you want to see your price of what you're digging out of the ground go up. But I know that there's also, you can't just scale up a silver mine in 20 minutes just because the price is up. So how has the increase of price impacted the mining sector? Are we starting to see some movement towards trying to increase output? And how does that look on the supply side?

Michael DiRienzo: Well, in many cases, the mining you see today was put into plans 10 years ago in 2016. So you are seeing companies spend a little bit more on exploration, but they're not doing it recklessly. It seems to be, at least to me, that it's coming off of existing projects looking for extra veins or new veins on those projects. But regardless, we are still calling for the sixth year of a structural market deficit. And we're thinking still that it's going to be about 46 or 50 million ounces. That could increase if the demand side increases, but we're not going to see an influx of new silver supply to the market. As a matter of fact, we had a 3% increase in mine production in 2025, and we're calling for a 0.3% decrease in 2026.

Mike Maharrey: What about the recycling side of it?

Michael DiRienzo: Well, on the recycling side, we think there's going to be a quite substantial jump of about 7% this year. But when you add those numbers up together to form the supply side, we still think the deficit will exist this year for sure.

Mike Maharrey: Yeah. And that'll be the sixth straight deficit, correct?

Michael DiRienzo: Yes, we are in that year right now. Yes. Yeah.

Mike Maharrey: And can you explain to folks, I think sometimes people have a hard time understanding what we mean by deficit, and it doesn’t necessarily mean that that silver doesn't exist anywhere, that people can't get it at all. But what are the ramifications of these persistent year-on-year supply deficit? What does that actually mean?

Michael DiRienzo: Well, demand is stronger than supply on an annual basis, and it has been for the last six years. Now, does that mean there's no silver out there? Of course not. There is above-ground stocks of silver. When you look at what happened last year in the beginning of 2025 with the threat of potential tariffs on Canada and Mexico with respect to silver investment grade bars, industrial silver, you saw a lot of silver flow over from London, other parts of the world to New York in anticipation of April 2nd, Liberation Day. Precious metals were left off the table. But when you look at the LBMA, and let's say they had 750 million ounces of silver in their vaults, they may have a little more, they may have a little less. About 75% of that, Mike, is already allocated to ETPs across the globe. So you have a small free float of silver.

And of course, it's extraordinarily price sensitive in terms of moving the silver out of those vaults.

Mike Maharrey: Yeah, and it's not an easy thing. It got really crazy. We were actually sending 1,000 ounce bars over to India from Money Metals. Oh,

Michael DiRienzo: I remember that. That was in October of last year during Diwali.

Mike Maharrey: Yeah, absolutely. Yeah, I think that is indicative of the fact that when you have this tightness in the market, even what would've possibly been a minor disruption under normal circumstances becomes more significant. We had this movement of metal because of the tariffs, and then it was kind of displaced, and it's not easy to move tons of silver around the world.

Michael DiRienzo: No, it's not. And then you'll recall the lease rates on silver went through the roof. The EFP moved forward. It was a very, very tight market at the time.

Mike Maharrey: Do you think that we're in a situation now where there is the risk of additional squeezes like that?

Michael DiRienzo: Absolutely. Absolutely. No question about it.

Mike Maharrey: Yeah. So just looking forward, we've been kind of range-bounded and we have seen a bit of a breakout as I guess I can't even keep up with the news on Iran. I can't ever figure out whether it's good or bad today. But generally speaking, there's been a little bit of optimism, and we've seen some optimism that maybe the Fed's not going to have to raise interest rates given the employment data that we've gotten. So we've seen some boost in both gold and silver, but still I would still probably describe the prices range-bound. What do you think is going to have to happen out there to really get silver moving again?

Michael DiRienzo: Well, I think that we're going to need to see more economic data from the industrial side. I also think that as soon as this war concludes, the straits are a powerful source for all goods and services. The threat or the closure of those straits impacts basically everything that we consume. And I think that we need a resolution to this as soon as possible before we start getting into the '70s and so forth.

Mike Maharrey: Yeah. Yeah. I think you're absolutely right. The war is almost like a blanket over the entire market until that's lifted off. It's really difficult for people, I think, to even focus in on some of these fundamentals that we're talking about.

Michael DiRienzo: Correct.

Mike Maharrey: I think it's important for folks to recognize what's going on with these more fundamental dynamics because at some point that blanket will come off, I guess, and we'll see some return to sanity maybe. I don't know.

Michael DiRienzo: Well, what we saw, Mike, I mean when the war began, we saw liquidations in gold and silver ETPs. Net inflows of about 270 million ounces happened in 2025. And we've had some outflows this year of about 6%. But we're hearing that that's picking back up again. And so I think people, I don't think they're comfortable with the status quo globally in terms of geopolitics. I think, like you mentioned, I think there's hope that this will be resolved in the very near future.

Mike Maharrey: Yeah. All right. Well, let me get you out of here on a kind of a fun question. One of my favorite things that you guys do is your, I guess it's bimonthly Silver News. And there's always these fascinating things in the silver news about new technologies and new uses for silver, both in the electronics and in the industrial field, but also a lot of in medicine and whatnot. And I'm curious if you have something, kind of a favorite or something that just really struck you like, "This is super cool." A really neat application for silver that you find fascinating or really like or that has grabbed your attention.

Michael DiRienzo: Sure. And this is at the smaller scale with respect to demand, but nonetheless, silver's use in health and medicine is not as well-known as it should be. I mean, it's a natural antibacterial. One of the things that people are not aware of that in hospitals, silver is coating the operating rooms is the operating table. Silver is on the instruments. It's used in conjunction with others to, not metals, but cleaning agents to disinfect hospitals. It's sewn into the drapes. It truly is nature's miracle metal. And you'll see uses of silver in medicine almost every day. I mean, we're doing a story in the August silver news about how nano-silver helps doctors administer a correct drug dosage. So, little things that people don't see or read about. This is interesting stuff. And silver is of course at the backbone of these new discoveries. So, I would say silver and health and medicine.

And when you add up water purification, not just for personal consumption, but also for pools and jacuzzies and so forth, when you look at how silver fights Legionnaire's disease and any breakout, whether that be in a pool or a locker room, silver comes to the rescue. And silver basically, as I mentioned, natural antibacterial, but it promotes healing and it prevents infection.

Mike Maharrey: Yeah. I am not a doctor and I'm not making any statement of relating to health, but I know people who take colonial silver as a way to deal with illnesses and sickness. And they say that they found it to be very helpful and successful for them, and that just goes to that whole complex. And I’m with you. I really am fascinated by the medical uses of silver. That may have a little bit to do with it. At one point I thought I was going to be a doctor, but -

Michael DiRienzo: Well, hey, there's still time.

Mike Maharrey: No, there's not. Organic chemistry closed that door for me.

Michael DiRienzo: I think it did for many people.

Mike Maharrey: Yeah, no doubt. Well, I really appreciate you coming on and giving this really good overview of where we are in the silver market. It'll be interesting to see how we move forward. And as you say, I really hope we do get through this Iran-US conflict and can kind of move on because I mean -

Michael DiRienzo: I agree. I agree.

Mike Maharrey: Beyond the loss of life, it has been so disruptive on the economy and continues to be so. Absolutely. No,

Michael DiRienzo: We think it's going to be a great year for silver. It already has. And we think that not only the average silver price at the end of the year is going to be quite strong. We think it will set a record. It already has. We think new floors have been set in the market. This is not a $13 or $15 metal anymore. It's a metal that's trading on its fundamentals, and it's a metal that's trading on both its industrial uses and its investment potential.

Mike Maharrey: Yeah, absolutely. And I think you make a really, really good point. We look at the correction, and I think a lot of people are kind of negative. Oh man, silver. Oh, look how far it's down. Right. We're at $65 an ounce, ladies and gentlemen. I mean, it wasn't long ago that we were talking about 13, 14, $15 silver.

Michael DiRienzo: Absolutely. Absolutely.

Mike Maharrey: Keep that in perspective.

Michael DiRienzo: If I go through the World Silver Survey here, Mike, and look at some of the average prices of silver over the course of the last 10 years, it was $17.05 in 2017, $15.71, $16.21 in 2019, $23.35 in 2023, $28.27 in 2024, and $40 in 2025. And we're talking above 70 this year. So, the metal is on the right track.

Mike Maharrey: Yeah, absolutely. So before we go, I do want you to let folks know where they can find the Silver Institute and maybe, excuse me, highlight some of the work that you guys put out that people will be interested in.

Michael DiRienzo: Sure, sure. So we can be found at silverinstitute.org. And from there, you can learn all about the many aspects and fascinating facets of silver. You can also sign up for our Silver News, which is a bimonthly publication as you referenced earlier. We put out press releases. We just released a report a few weeks ago on the gold-silver ratio. Everything can be found on our website. A whole library of world silver surveys are online. So if you're looking for anything that has to do with silver, go to wwwsilverinstitute.org.

Mike Maharrey: Yep. Do that. And as I say, I rely on the data that you guys produce on virtually a daily basis. And that report on the gold-silver ratio was fantastic, and it was convenient that it came out at a point where I had several people in my ear saying, "Oh, that gold-silver ratio is meaningless now." So it was nice

Michael DiRienzo: To have that. When you read that report, it's lengthy, but it's filled with great anecdotes. We really examined the years of 1970 through today, but we reference the early times. It truly is one of the world's oldest economic indicators.

Mike Maharrey: Yeah, absolutely. I look at it almost on a daily basis just to see where we are. So that's an example of the work that comes out of the Silver Institute. Thank you so much, Michael, for being on the show today. And I apologize for my scattered brain. It's just been one of those mornings, but -

Michael DiRienzo: No worries. Thank you, Mike. I really appreciate it.

Mike Maharrey: Yeah, it's always a pleasure, and we'll talk again soon. Thank you so much.

Michael DiRienzo: Yes, sir.

Good stuff once again there from our friends at the Silver Institute and we certainly enjoyed having Michael DiRienzo on and appreciate getting his insights on the state of silver and other matters.

And that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Check out the Money Metals Midweek Memo podcast as well. To listen to any of our audio programs just go to MoneyMetals.com/podcasts or find them on places like Apple Podcasts, Google Podcasts, Spotify or other podcast platforms. And as a big help to us we would ask you to please like, subscribe, download and rate our podcasts. Doing so helps us extend the reach of this material.

Until next time, this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a wonderful weekend everybody.

Money Metals to Honor Twin Falls Hero Jordan Salinas with 25-Ounce Silver Bullet Award

Fri, 14 Aug 2026 00:00:00 EST

EAGLE, Idaho — August 14, 2026 — https://share.google/z2vB3pmild7GOtJOs"; target="_blank" rel="noopener">Money Metals Exchange will today honor Jordan Salinas, whose armed intervention during the https://headlineusa.com/pistol-wielding-patriot-praised-for-responding-to-idaho-mass-shooter/"; target="_blank" rel="noopener">August 1st mass shooting in Twin Falls, Idaho, was credited by police with helping prevent further casualties, with a specially engraved https://www.moneymetals.com/25-oz-silver-bullet/309";>25-ounce Silver Bullet Award at a private ceremony inside Money Metals’ secure vaulting facility in Eagle.

Joining Money Metals in recognizing Salinas will be Idaho State Representatives https://share.google/iiNo7m4xAHEYz0xc3"; target="_blank" rel="noopener">Rob Beiswenger and https://share.google/oPzHmEd4lIohwYSlL"; target="_blank" rel="noopener">Josh Tanner, and State Senator https://share.google/rJwJ08DeDf9xuOF4F"; target="_blank" rel="noopener">Tammy Nichols.

Salinas, a home healthcare worker, sprang into action after a gunman opened fire on unsuspecting victims outside an In-N-Out Burger in Twin Falls. Rather than fleeing the danger, Salinas confronted the attacker and returned fire, forcing the gunman to take cover and leave the scene.

!!--Product-309--!!

https://www.tfid.org/m/directory/employee?eid=53"; target="_blank" rel="noopener">Twin Falls Police Chief Matthew Hicks later credited Salinas’ intervention with potentially saving lives.

“We believe [Jordan’s] actions drove the suspect from the scene and prevented further casualties,” Hicks said during a news conference following the shooting.

Three people were killed in the attack, and several others were injured and hospitalized. Authorities have indicated the toll could have been even worse had Salinas not intervened.

“We are honored to present Jordan with this 25-ounce Silver Bullet as a small token of our gratitude for an extraordinary act of courage,” said https://share.google/V551n6J59p0KkFffp"; target="_blank" rel="noopener">Stefan Gleason, CEO of Money Metals.

“When innocent people were under attack and every second mattered, Jordan chose to act. His willingness to put himself in harm’s way to protect complete strangers deserves recognition.”

Money Metals has long been an advocate for the right of law-abiding Americans to keep and bear arms, including supporting the right of its employees to carry firearms at its Eagle facility, subsidizing employees’ acquisition of firearms and ammunition, and providing ongoing firearms training under the supervision of Money Metals’ security team of former law enforcement professionals.

“No one ever wants to find himself in the situation Jordan faced that day,” Gleason said. “But when the unthinkable happened, Jordan was prepared. He stood between a violent attacker and innocent people. That is courage in its most meaningful form.”

Salinas has said that the 2021 shooting at Boise Towne Square Mall prompted him to think seriously about being prepared by exercising his constitutional right to carry a firearm should he ever encounter a similar situation.

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That preparation took on profound significance on August 1st.

“Everyone says, ‘It’s not going to happen here,’” Salinas has said. “But what if it does?”

For https://www.youtube.com/@PovertyOperator/videos"; target="_blank" rel="noopener">Jordan Salinas, that question ceased to be hypothetical. When the moment came, he acted.

The https://www.moneymetals.com/25-oz-silver-bullet/309";>25-ounce .999 fine silver bullet, engraved in Salinas’ honor, will be presented during the private event on Friday afternoon at Money Metals’ Eagle headquarters and depository facility.

The ceremony will recognize not only Salinas’ actions that day, but the larger principles his actions exemplified: preparedness, courage, self-reliance, and the willingness to defend innocent life.

Sports Betting the Newest Gen Z Investment Strategy in the War Against Inflation

Fri, 14 Aug 2026 00:00:00 EST

Let’s imagine I save enough money to buy a car for my kid. However, he’s only 13, so he won’t be driving for a few years.

In a sane world, I could just stick the money under my mattress and buy a car in three years. But we don’t live in a sane world. We live in a world where the government https://www.moneymetals.com/podcasts/2025/11/05/inflation-is-the-plan-004459";>relentlessly devalues your money. If I pull the cash out from under my mattress in 2029 or 2030, it almost certainly won’t be enough to buy a car at the inflated price.

Maybe I should take some of that money and make a bet on tonight’s Bucs-Jets preseason game. If I win, I can pad the savings and maybe afford that car.

Sounds crazy, right?

Maybe not.

Apparently, a lot of people have turned to sports betting as an investment strategy.

It’s Impossible to Save

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https://youtu.be/lmvFyBBJORM?si=ViV8DnwXn7d7vpR2"; target="_blank" rel="noopener">Inflation is tough on ordinary working people. Eventually, wages catch up with price inflation. However, they always lag. That means workers are constantly engaged in an unwinnable game of “Chase the Inflation.”

It’s even tougher on people trying to save or living on a fixed income. Rising prices make them poorer and poorer every month.

This is the root of the affordability problem. It’s not that kids are buying too many $20 burritos. The problem is that a burrito shouldn’t cost 20 freakin’ dollars!

As with any economic dynamic, inflation creates incentives.

For savers, it drives them to seek bigger and bigger returns to keep up with the government’s monetary devaluation. At first, a simple savings account with a relatively low yield will do the trick. But as the dollar loses purchasing power, you need a better return to keep up. So, maybe you stick your money in a higher-interest-yielding CD.

Soon, that’s not even enough. Your interest rate is better, but https://www.moneymetals.com/news/2025/02/17/why-inflation-and-real-interest-rates-are-bullish-for-gold-003841";>the real interest rate when you factor in inflation is negative. You're still losing purchasing power over time. You need better returns, so you start chasing gains on the stock market.

Now, that’s all well and good, but it introduces risk. A savings account or a CD is a relatively safe place to park money. But the stock market can get volatile. You might earn a bigger gain. On the other hand, you can quickly lose a lot of money.

Risk or no risk, you want to retire. You want to have enough money to do all the things you want to do, so you suck it up and chase the rainbow.

And pretty soon, you find yourself taking on even more risk to boost your returns. You start speculating on startups and junk stocks.

You can see how easily this scenario can play out.

I Bet I Can Save!

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Well, now we’ve taken things a step further.

According to recent Bloomberg research, people are increasingly using sports betting as a “deliberate part of long-term financial strategy.”

Talk about taking on risk.

Around 12 percent of the people surveyed said that gambling was one of their investment tools.

Gen Z is driving this trend, with 26 percent saying sports betting is part of their investment strategy. Meanwhile, 52 percent of the Gen Z respondents admitted directing investment funds into sports betting over the last year.

https://www.moneymetals.com/uploads/content/sports-betting.png"; width="600" height="454" class="mx-auto p-3" alt="" />

In his 1964 book “What You Should Know About Inflation,” Henry Hazlitt saw this coming.

“Inflation … encourages and rewards speculation and gambling at the expense of thrift and work.”

It’s easy to point fingers and get all judgy about “young people these days” gambling. But what are they supposed to do? Their money is garbage, and they know it. When you create incentives, people will respond.

My friend Jp Cortez over at the Sound Money Defense League summed it up perfectly, observing that “Fed policy has destroyed money as a savings technology.”

“Inflation and the erosion of cash returns amplify the search for higher-risk ways to 'get ahead.' As [economists Ludwig von] Mises and [Murray] Rothbard warned for decades: the slide from sound money ends in gambling degeneracy.”

Fortunately, there is a way to preserve your wealth over time without hoping the Tampa Bay Buccaneers will cover the spread. You can save in real money -- gold and silver.

Anyway, that’s my thought for today. Now, excuse me. I need to sell some stock and place a bet on that game tonight.

Chinese Investment Demand Was Resilient in Q2 Despite Rangebound Prices

Thu, 13 Aug 2026 00:00:00 EST

Despite gold trading sideways in the second quarter after its big price correction in the first, Chinese physical gold investment demand remained robust.

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Chinese investors were key drivers of the gold bull market last year, as Western investors generally sat out the rally until the end of the year.

At 107 tonnes, Chinese retail gold investment fell by 48 percent quarter-on-quarter in Q2, and 7 percent year-on-year. However, the data was skewed by an all-time high of 207 tonnes in Q1.

Even with the steep drop in demand from the first quarter, second-quarter Chinese physical investment gold demand was strong from a historical perspective, ranking as the third-highest Q2 since 2010.

When you factor in the 29 percent year-over-year increase in the local gold price, Chinese retail gold investment demand set a second-quarter record.

Through the first half of 2026, retail gold investment demand was up 31 percent.

https://www.moneymetals.com/uploads/content/Chinese-retail-investment-demand-by-year-july-26.png"; width="590" height="438" class="mx-auto p-3" alt="" />

According to Metals Focus, investment gold buying was primarily concentrated in April and the first weeks of May. Despite slowing from the exceptional levels seen in Q1, volumes during this period remained healthy on an annual basis.

Demand slipped in the latter half of May and into June, as a range-bound gold price weakened sentiment. Investors pivoted to riskier domestic AI-related equities.

Metals Focus analysts noted that “given the sharp price declines across the major precious metals during Q2, physical investment generally softened.”

“Nevertheless, gold outperformed both silver and platinum, highlighting its relative resilience.”

While Chinese investors tend to favor physical metal, ETF flows also reflected strong investment demand.

Despite a large outflow of gold in June, Chinese ETFs added 29 tonnes of metal in H1, the second-strongest start to a year on record. Total assets under management (AUM) rose slightly by 1 percent.

https://www.moneymetals.com/uploads/content/china-gold-etf-flows.png"; width="600" height="329" class="mx-auto p-3" alt="" />

Meanwhile, interest in Gold Accumulation Plans (GAPs) offered by local commercial banks remained solid in Q2 despite a moderate slowdown.

Tax Incentives and Disincentives Driving Chinese Precious Metals Markets

New Value Added Tax (VAT) rules imposed last November helped boost gold investment relative to other metals. Under the rules, gold bars and coins sold by Shanghai Gold Exchange (SGE) member companies remained exempt from VAT. However, silver and platinum bars and coins, along with gold investment products sold by non-SGE members, are subject to 13 percent VAT on their full value.

According to Metals Focus, the new policy left non-SGE members at a price disadvantage, incentivizing them to switch their focus from gold to silver bars.

“Silver’s rally to a series of record highs, marketing campaigns highlighting its favorable fundamentals, and its lower unit value for investors priced out of gold all contributed to a dramatic surge in silver bar sales during late 2025. This momentum extended into Q1.26, resulting in widespread product shortages, longer delivery times and higher premiums.”

However, silver demand slipped as the price fell earlier this year. That incentivized many Johnny-come-lately silver bar suppliers to flip back to gold.

“Online stores and retailers now serve as sales agents for SGE-member companies, earning commissions on gold bar sales, while manufacturers produce gold bars for SGE members under a processing model whereby only labor costs are charged.”

VAT rules have also shifted Chinese demand from investment jewelry to gold bars.

“While gold retail investment remains VAT-free, consumers now effectively pay an additional VAT charge of around 7 percent on gold jewelry. Historically, a relatively large proportion of Chinese gold jewelry purchases have been driven by quasi-investment motives. The policy change has been particularly detrimental to heavy, plain 24K gold jewelry, which is typically sold by weight and carries relatively low labor charges. As a result, Q2.26 marked the third consecutive quarter in which retail investment exceeded jewelry consumption.”

https://www.moneymetals.com/uploads/content/chinese-quarterly-gold-demand-26.png"; width="609" height="437" class="mx-auto p-3" alt="" />

Looking Ahead

As we move through the final half of 2026, Metals Focus expects Chinese gold demand growth to continue at a moderately slower pace. The forecast is for a 20 percent year-on-year increase to around 500 tonnes.

“The slower pace of growth in H2.26 partly reflects the already elevated base established last year. Gold’s growing appeal as a store of value and safe-haven asset, our constructive price outlook, the sentiment boost from the PBoC’s gold reserve accumulation program, the ongoing shift from quasi-investment jewelry to gold bars, and aggressive supply chain marketing of investment products are expected to remain the key demand drivers.”

Chinese investors were a key pillar of support during last year's gold bull market.

Gold coin and bar demand hit a 12-year high of 1,374.1 tonnes in 2025 with a record-breaking value of $154 billion. More than half of that global coin and bar demand came from two countries – China and India.

Chinese investment demand has continued to provide support even after the gold price corrected and struggled against headwinds caused by the U.S.-Iran war and worries about rising interest rates.

Maryland, Alaska Leaders Named “Sound Money Legislators of the Year”

Thu, 13 Aug 2026 00:00:00 EST

One of the largest national precious metals dealers and depositories in the U.S. has again teamed up with the nation’s leading sound money public policy group to recognize state legislators championing sound money policies.

Money Metals and the Sound Money Defense League today named Maryland lawmakers Del. Wayne Hartman and Sen. J.B. Jennings and Alaska Rep. Kevin McCabe as the 2026 Sound Money Legislators of the Year.

In Maryland, Del. Wayne Hartman and Sen. J.B. Jennings are recognized for restoring the sales tax exemption on purchases of precious metals that was controversially repealed in 2025.

Prior to 2025, Maryland’s sales tax law included a full sales tax exemption on all purchases of gold and silver made above $1,000. A cynical new law imposed a sales tax on all purchases, regardless of order size, that were made outside of the Baltimore Convention Center. This effectively eliminated the sales tax exemption for the overwhelming majority of transactions in the state.

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The Sound Money Defense League worked closely with bill sponsors and their offices to craft final bill language for https://www.soundmoneydefense.org/news/2026/05/26/maryland-reverses-course-restores-sales-tax-exemption-on-gold-and-silver-000673"; target="_blank" rel="noopener">Senate Bill 309 and House Bill 500, provided talking points about the measure and research from other states, mobilized thousands of Marylanders in support of the bill, and testified in Annapolis.

Sen. Jennings said, “I'm deeply honored to receive the Sound Money Defense League's Legislator of the Year award...Every time government creates or increases a tax or fee, we [legislators] have a responsibility to consider the broader consequences for working families, small businesses, and Maryland's economy.

“The tax on precious metal bullion and coins placed an unnecessary burden on small business owners, and its impact extended well beyond a single industry. After hearing directly from Maryland businesses about lost sales, lost customers, and the ripple effects on surrounding industries, it was clear that we needed to act.”

Maryland’s 2025 tax law had been devastating to businesses and investors. In-state dealers testified they had lost more than 70% of their business volume overnight, with customers choosing to leave the state or shop online and ship to a sales-tax-free state.

On the other side of the country, Alaska Rep. Kevin McCabe (then a freshman legislator) worked with the Sound Money Defense League on legislation to remove taxes on precious metals as well as reaffirm their status as legal constitutional money.

Forty-five states have already fully or partially eliminated the state sales tax on the purchase of precious metals, including Alaska. However, local government bodies in Alaska could (and did) still impose sales tax on purchases of the monetary metals. https://www.moneymetals.com/news/2026/05/29/alaska-ends-all-taxes-on-gold-and-silver-reaffirms-their-monetary-status-004950"; rel="noopener">House Bill 1 eliminated local tax assessments on gold and silver coins, bars, and rounds.

This measure also reaffirmed Alaska’s recognition of gold and silver as money as outlined in Article I, Section 10 of the U.S. Constitution, which says “No state shall… make any Thing but gold and silver Coin a Tender in Payment of Debts.”

Rep. McCabe and his Chief of Staff Angela Stephl worked for five years to refine the bill language, coordinate with fellow lawmakers to garner support for the measure, and work with outside constituencies. Executive Director of the Sound Money Defense League, Jp Cortez, traveled to Juneau several times to participate in hearings and meet with legislators.

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After receiving the award, Rep. McCabe said, “I am deeply honored to receive the Sound Money Legislator of the Year award. Having worked with SMDL [Sound Money Defense League] since 2021, I know it is the gold standard of national sound money policy efforts.”

“Our bill removed taxes on gold and silver and reaffirmed them as legal tender, giving Alaskans greater opportunity and access to inflation-proof assets while aligning our state with the Constitution. My team and I will continue working toward sound money for Alaska in the future,” the Frontier State leader continued.

In May, Rep. McCabe’s bill was enacted into law with broad support from lawmakers and sound money supporters across the state.

Several other lawmakers also made key contributions to the national movement to advance sound money policies, thereby earning honorable mention in this year's awards.

In Wisconsin, Rep. Shae Sortwell and Sen. Rachael Cabral-Guevara are recognized for their work in passing multiple sound money bills over a two-year period.

In 2024, the Sound Money Defense League worked closely with Rep. Sortwell to make Wisconsin the next state to eliminate the sales tax on purchases of gold and silver coins, bars, and rounds. In addition to creating massive grassroots pressure in support of the bill, Cortez again traveled to Madison to testify at numerous hearings. Sen. Cabral-Guevara’s vocal support of the legislation during committee hearings was crucial in ultimately passing a bill to https://www.soundmoneydefense.org/news/2024/03/21/signed-into-law-wisconsin-formally-ends-sales-taxes-on-gold-and-silver-000534"; target="_blank" rel="noopener">eliminate this tax.

Wisconsin Gov. Tony Evers’ signature on Assembly Bill 29 officially struck this tax in 2024.

This year, Rep. Sortwell and Sen. Cabral-Guevara introduced legislation to remove the sales tax exemption certificate requirement to be eligible for the exemption. In March, Gov. Evers signed SB 748, Wisconsin’s second sound money bill in three years.

Only five states still impose a sales tax on all purchases of precious metals: Washington, Hawaii, New Mexico, Maine, and Vermont. League executives expect exemption bills to be introduced in the majority of these states in the upcoming legislative session.

Trump Administration Runs Largest Monthly Budget Deficit in Five Years

Thu, 13 Aug 2026 00:00:00 EST

Without tariff revenue to paper over excessive spending, the U.S. ran the biggest monthly budget deficit in five years last month.

The Trump administration spent $432.31 billion more than it took in in July. It was the highest monthly budget shortfall since March 2021, amid the COVID stimulus era and the third-largest deficit on record.

With August beginning on a weekend, there were some calendar adjustments, as around $99 billion in August benefits were paid out in July, inflating the month's outlays. However, even adjusting for these calendar shifts, the July deficit was still $333 billion. That was up 18 percent from the prior year.

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The July shortfall pushed the 2026 budget deficit to $1.8 trillion with two months remaining in the fiscal year. The deficit is now larger than the 2025 shortfall and is on track to eclipse $2 trillion.

Keep in mind that the federal government ran $1 trillion deficits for the first time during the Obama administration, during the Great Recession. Today, we’re seeing $2 trillion deficits, with the economy supposedly expanding.

A surge in tariff revenue moderated deficits last year and at least partially obscured the out-of-control spending problem. However, with the Supreme Court declaring the “Liberation Day” tariffs unconstitutional, Uncle Sam is now experiencing negative tariff receipts as the government refunds past tariff payments.

The government refunded $33.38 billion in tariffs in July. That sent tariff revenue negative by $8.55 billion last month.

Total government tax receipts came in at $334.01 billion. That was 1 percent lower than last year’s July revenue.

Through the first 10 months of fiscal 2026, the Treasury has collected $4.49 trillion, about 3 percent more than through the same period last year.

The real problem continues to be on the spending side of the ledger.

The Trump administration blew through $766.31 billion last month. That was a 22 percent increase from July 2025 spending. When factoring out the $99 billion for calendar adjustments, the federal government still spent $677.31 billion.

https://www.moneymetals.com/uploads/content/july-26-federal-spending-.png"; width="700" height="377" class="mx-auto p-3" alt="" />

So far in fiscal 2026, Uncle Sam has spent $6.28 trillion. That’s a 3.3 percent increase compared to the same period last year.

A 3.3 percent increase in spending might not sound significant. But weren't we told there would be spending cuts?

In fact, there were some cuts in the Big Beautiful Bill (along with spending increases).

The increased spending comes despite cuts to the EPA and the Department of Education, along with staffing reductions that are now showing up in the data. Lower disaster spending also helped moderate spending levels through the first two months of fiscal ’26.

Looking at the big picture, the spending trajectory is up. Even with all the hype about DOGE and some lip service to cutting spending during the early days of the Trump administration, the U.S. government spent just over $7 trillion last year. That’s an average of $583.3 billion per month or $19.2 billion per day.

And now there's a war.

Despite some non-specific talk about “spending cuts,” there seems to be little to no commitment to tackle runaway spending. In fact, the powers-that-be constantly find new reasons to spend money, whether it is a crisis at home or a war overseas.

The Cost of the Debt

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The cost of servicing the debt continues to climb in this higher-interest rate environment as the government keeps piling on new debt.

Interest expense has grown into the second-largest spending category in the federal budget behind only Social Security.

In July, the Treasury forked out $117.57 billion on interest payments alone. That was down slightly from a record $185 billion in June.

July interest payments pushed total interest expense to $1.17 trillion through the first 10 months of fiscal 2026. That was up 15.5 percent compared to the same period in fiscal ’25.

Interest on the national debt cost $1.2 trillion in fiscal 2025. That was up 7.3 percent over 2024.

Net interest (interest expense – interest receipts) was $104 billion in July.

Through the first 10 months of the fiscal year, the federal government spent more on interest on the debt than it did on national defense ($804 billion) or Medicare ($955 billion). The only higher spending category is Social Security ($1.4 trillion).

Much of the debt currently on the books was financed at very low rates before the Federal Reserve started its hiking cycle. Every month, some of that super-low-yielding paper matures and must be replaced by bonds yielding much higher rates.

When people say the spending is unsustainable, it feels like an understatement. In fact, it’s fair to call https://www.moneymetals.com/news/2026/03/26/the-us-government-is-insolvent-yes-that-matters-004791";>the federal government insolvent.

However, very few people in the political class seem the least bit interested in tackling the problem. The bad news is that at some point, the problem is going to tackle them.

Beyond CPI: The Complete Inflation Story -- July 2026

Thu, 13 Aug 2026 00:00:00 EST

Each month, the Bureau of Labor Statistics releases the Consumer Price Index (CPI) report. Policymakers, pundits, and economists use this data to gauge the current inflation situation. For instance, the July CPI cooled a bit, raising hopes that the Fed will not raise interest rates next month.

However, the CPI only tells part of the inflation story. Relying solely on CPI is a little like looking at the temperature and claiming that you know the weather.

CPI tracks price inflation – more specifically, the change in the price of a basket of goods. But historically, https://youtu.be/lmvFyBBJORM"; target="_blank" rel="noopener">inflation was defined as an increase in the supply of money and credit. Rising consumer prices are one of the impacts of this monetary inflation. In other words, the CPI measures a symptom of monetary inflation.

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The CPI can tell us when past monetary inflation is showing up in the economy, but it can’t predict the trajectory of inflation. That means we need to look at money supply metrics to understand the complete inflation story.

With this in mind, when the CPI data comes out each month, I plan to produce a more comprehensive inflation report using four metrics – CPI, changes in the M2 money supply, changes in the Federal Reserve balance sheet, and the Chicago Fed National Financial Conditions Index.

July CPI Data

Based on the headlines, you probably assume inflation is easing.

Prices rose just 0.1 percent month-on-month in July, https://www.bls.gov/news.release/cpi.nr0.htm"; target="_blank" rel="noopener">according to the latest BLS data. That follows on the heels of a -0.4 percent decline in prices in June.

On an annual basis, the headline CPI fell from 3.5 to 3.4 percent.

Stripping out more volatile food and energy prices, core CPI ticked up by 0.2 percent, with the annual increase in prices dropping from 2.6 to 2.5 percent.

While still above the mythical 2 percent target, all these numbers fell within Wall Street forecasts, and they appear to be trending in a positive direction.

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Another big drop in energy prices helped pull the overall CPI lower. The energy index dropped -1.5 percent month-on-month, driven by a healthy -2.9 percent dip in gasoline prices.

The medical care services index charted the steepest price increase in July, surging by 0.6 percent.

Increases in food, shelter, and service prices were modest.

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With the sanguine price inflation data, traders lowered the odds of a September interest rate hike to 42 percent, according to the CME Group’s FedWatch gauge.

Morgan Stanley Wealth Management chief economic strategist Ellen Zentner https://www.cnbc.com/2026/08/12/cpi-inflation-report-july-2026.html"; target="_blank" rel="noopener">told CNBC the CPI data “will keep the ‘no need to hike rates’ narrative that took hold after last week’s jobs report intact.”

“There will be another round of inflation data before the September FOMC meeting, so the storyline could still change. But unless those numbers tell a much different story, the Fed will likely still be in a position to leave rates unchanged next month.”

But when we look at the other inflation indicators, we find inflation isn’t nearly as tame as the CPI might indicate. In fact, it appears to be accelerating.

M2 Money Supply

While prices are cooling, the money supply is increasing rapidly. That is, https://www.moneymetals.com/news/2024/01/12/common-definition-of-inflation-you-hear-today-is-wrong-government-propaganda-002925";>by definition, inflation. However, we won’t see its impact on the general price level for months.

The money supply rose by nearly $100 billion, from $23.06 billion in May to $23.16 billion in June.

Since June 2025, the money supply has surged from $21.94 billion to 23.16 billion, a 5.6 percent increase.

In other words, we have an actual inflation rate of 5.6 percent.

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This monetary inflation will eventually find its way into consumer prices. (It could also manifest in rising asset prices such as real estate and equities.)

The Federal Reserve Balance Sheet

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One reason the money supply is increasing is due to central bank money printing.

While Warsh & Co. talk tough on inflation, the Fed is running https://youtu.be/ipaQAgOCJBk"; target="_blank" rel="noopener">quantitative easing (QE) operations to create artificial demand for Treasuries and hold yields lower than they otherwise would be. That means the central bank is buying U.S. Treasuries and holding them on its balance sheet. To run this operation, the Fed creates money out of thin air to pay for these bonds, and it is injected into the economy. Again, this is, by definition, inflation.

The Fed will never admit to running QE. It will tell you it is just a technical operation to keep the financial system’s plumbing clear. But no matter what you call it, the practical impact is the same. The Fed’s balance sheet expands, and new money flows into the economy.

The https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm"; target="_blank" rel="noopener">central bank’s balance sheet began ticking higher in December, and the upward trend continues today. In the last month, the balance sheet increased from $6.72 trillion to $6.75 trillion.

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I can’t overstate the fact that the Fed is easing monetary policy through its balance sheet operations, even as it claims to be fighting inflation. Sure, the increase to the balance sheet is modest. But if you’re serious about an inflation fight, why isn’t the balance sheet shrinking?

The answer is that there is an evolving bear market in bonds. With yields rising and pushing up the federal government’s interest costs, the Fed has no choice but to step in and support the Treasury market.

National Financial Conditions Index

While everybody imagines monetary policy is tight with the federal funds rate set between 3.5 and 3.75 percent, from a historical perspective, it is loose.

The Chicago Fed’s own https://www.chicagofed.org/research/data/nfci/current-data"; target="_blank" rel="noopener">National Financial Conditions Index (NFCI) reveals this.

As of the week ending August 7, the NFCI stood at -0.55. The minus sign indicates that financial conditions are historically loose.

Surprisingly, the NFCI never went positive, even during the height of the Fed’s tightening cycle. The highest it got was -0.09 in October 2022.

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Again, this reveals that the Federal Reserve inflation fight wasn’t nearly as aggressive as advertised. It has maintained a historically loose monetary policy through the entirety of this inflation cycle.

It also reveals that the economy is addicted to easy money. The fact that the central bank could never get financial conditions tight for fear of collapsing the debt-riddled bubble economy is telling. It certainly wasn’t because inflation was under control.

Conclusion

When you put all the data together, the inflation picture looks much more concerning than the sketch you get with the CPI data alone. It’s clear that inflation is far from under control. It is on the upswing.

We’re getting some relief from rising prices, but given the increasing money supply, there is undoubtedly more price pressure in the pipeline. Whether it manifests in consumer prices, asset prices, or both, remains to be seen.

The bottom line is it’s not the time to celebrate inflation’s demise. Absolutely enjoy the lower fuel prices. But remember, there is more inflation in the pipeline. One thing you can count on: the powers-that-be will relentlessly devalue your money – at least by the planned 10-plus percent every five years.

Dollar Dominance Is Cracking and the Fort Knox Gold Question Won’t Go Away

Thu, 13 Aug 2026 00:00:00 EST

Money Metals Midweek Memo host Mike Maharrey opened this week’s episode with an old-fashioned banking analogy: Imagine somebody repeatedly claiming to have $100,000 in the bank but refusing to produce a statement or even balance the checkbook. The money might be there, but without verification, skepticism would be reasonable.

That, Maharrey argued, is essentially the situation with America’s gold reserves. He suspects the gold at Fort Knox probably is there. But “probably” isn’t the same as an independent, comprehensive audit.

That question framed one half of the episode. The other centered on an issue Maharrey believes could have much broader economic consequences. That is, recent U.S. intervention to support the Japanese yen and what the unusual mechanics of that intervention may reveal about the deteriorating position of the U.S. dollar.

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The Dollar’s Reserve-Currency Advantage Is Under Pressure

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The United States recently intervened in currency markets to support the Japanese yen. Such interventions aren’t extraordinary by themselves, but Maharrey argued that the way Washington went about it was revealing.

Dollar reserve status is enormously important to the U.S. monetary and fiscal system. Global demand for dollars absorbs some of the currency created by the Federal Reserve, while international demand for U.S. Treasuries helps finance federal borrowing.

Maharrey stressed that the dollar isn’t likely to suddenly lose reserve-currency status overnight. In his words, it remains the “cleanest dirty shirt in the laundry hamper.” But he argued that persistent borrowing, spending, debt accumulation, and money creation are gradually making the monetary system more fragile.

Normally, if the United States wants to strengthen the yen, it can sell dollars and use the proceeds to buy yen. Increased demand for yen strengthens the Japanese currency, but selling dollars can simultaneously put downward pressure on the greenback.

This time, the Treasury reportedly did something different.

Instead of buying yen with dollars, the U.S. used euros from its reserves. That allowed Washington to support the yen without directly selling dollars. According to the Financial Times, the operation “blindsided” the European Central Bank, which reportedly wasn’t informed until after the intervention.

Why Washington Didn't Want to Sell Dollars

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UC Berkeley economist Barry Eichengreen argued in the Financial Times that the unusual transaction pointed toward a deeper concern - Treasury Secretary Scott Bessent and other U.S. officials may have worried that selling dollar securities to support the yen would put additional https://www.moneymetals.com/news/2026/08/11/joint-us-and-japanese-currency-intervention-reveals-eroding-dollar-dominance-005129";>pressure on the long end of the Treasury market.

That matters because weakening demand for Treasury securities means lower bond prices and higher yields. Higher yields, in turn, translate into higher borrowing costs for Washington.

Maharrey illustrated the problem with a simple example. If the yield on the 10-year Treasury is 3.5 percent instead of 2.5 percent, the federal government must pay more to borrow. That is especially problematic when the government is already spending more than $1 trillion per year on interest alone.

Japan's situation makes the dilemma even clearer.

When Japan needs to strengthen the yen, it can sell U.S. Treasury securities, receive dollars, and use those dollars to buy yen. Japan has apparently been doing exactly that. Its foreign currency reserves fell by $75.6 billion in May, an amount Bloomberg reported broadly matched the scale of yen intervention that month. Federal Reserve custody data also showed a decline in Japanese Treasury holdings consistent with liquidation.

But Japanese Treasury sales create a headache for Washington. More Treasuries hitting the market can push prices lower and yields higher precisely when the U.S. government needs to borrow enormous sums.

By stepping in to buy yen itself, Washington could therefore accomplish two things at once: support Japan’s currency and reduce Japan’s need to dump Treasuries.

Japan Can Get Dollars Without Dumping Treasuries

There is another piece to the puzzle.

Japanese officials have indicated they will use the Federal Reserve’s Foreign and International Monetary Authorities, or FIMA, Repo Facility for future currency-support operations.

The Fed created the facility in March 2020 after foreign institutions needing dollars began selling Treasuries during the pandemic, contributing to severe volatility and dysfunction in the Treasury market.

FIMA gives eligible foreign monetary authorities another option. Rather than outright selling Treasuries, they can pledge those securities as collateral and obtain dollars from the Federal Reserve. The loans have a maximum maturity of seven days but can be rolled over.

For Japan, that creates a way to https://www.moneymetals.com/news/2026/08/11/joint-us-and-japanese-currency-intervention-reveals-eroding-dollar-dominance-005129";>obtain dollars to support the yen without dumping Treasury securities onto the open market. For Washington, it potentially removes another source of selling pressure from the bond market.

Why Hold Reserves You Can't Freely Use?

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For Maharrey, this is where the story becomes a de-dollarization story.

Eichengreen argued that the developments suggest the dollar’s status as a reserve currency “is not what it used to be.” Central banks traditionally hold dollar reserves partly because the Treasury market is deep and liquid, allowing those assets to be bought, sold, and deployed in currency interventions.

But what happens if foreign central banks face pressure not to sell their Treasury holdings because Washington is worried about the effect on its own bond market?

Why hold reserves, Maharrey asked, if you can’t freely use them when you need them?

Eichengreen warned that the dollar is becoming less attractive as a reserve currency and predicted that other countries could intensify their search for alternatives. In other words, reserve diversification – another form of de-dollarization – could accelerate.

Gold Stands to Benefit

Gold is one obvious alternative.

Capital Economics economist Kieran Tompkins argued that concerns about central banks conducting foreign-exchange operations without upsetting U.S. officials over Treasury-market consequences could provide fresh impetus for central bank gold demand.

That matters because central bank buying has been one of the major pillars supporting the gold bull market in recent years.

Maharrey argued that this demand has helped gold hold around the $4,000 level despite significant interest-rate headwinds and relatively subdued enthusiasm among Western investors. Asian investors, meanwhile, have been aggressively buying the recent dip.

With expectations for a Federal Reserve rate hike fading and gold showing signs of breaking out of its range-bound trading pattern, Maharrey sees numerous indicators pointing toward a continuing gold bull market.

Rand Paul Goes to Fort Knox

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The second half of the episode shifted from international currency markets to America’s most famous gold vault.

A few weeks earlier, Treasury Secretary Scott Bessent had insisted that all of the gold at Fort Knox was present and accounted for, despite acknowledging that he had not personally visited the facility.

Then https://www.moneymetals.com/news/2026/08/11/rand-paul-becomes-a-pawn-in-fort-knox-gold-audit-debate-005130";>Sen. Rand Paul went to Fort Knox.

After spending roughly one or two hours inside the U.S. Bullion Depository, Paul emerged and declared that the gold was there – approximately 147 million ounces.

Maharrey wasn’t persuaded.

Based on the amount of gold the government says Fort Knox contains, there should be more than 300,000 gold bars inside. Many aren’t even standard modern bullion bars because some Fort Knox holdings originated with coins melted down following the gold policies of the 1930s. Those bars can have irregular weights and insufficient purity to qualify for international settlement.

In Maharrey’s view, there is simply no way somebody can verify more than 300,000 bars during a brief guided visit.

A Tour Isn't an Audit

Money Metals CEO Stefan Gleason sharply criticized the episode, arguing that Paul had effectively been “rolled” after being given the opportunity to tour the mysterious facility.

Gleason also noted that Money Metals operates a precious-metals depository twice the physical size of Fort Knox. He argued that a brief visit cannot establish that America’s gold is fully accounted for, much less answer questions about whether any of it is encumbered.

Another issue is purity. Gleason said 83 percent of the gold is unacceptable on global markets https://x.com/MoneyMetals/status/2086902241991221754?s=20";>due to insufficient purity.

The episode is especially striking because Paul co-sponsored the Gold Reserve Transparency Act of 2025 with prime sponsor Sen. Mike Lee. That legislation would have provided for a comprehensive audit of U.S. gold reserves.

Sound Money Defense League director Jp Cortez questioned why Paul would back a bill calling for a genuine accounting and then seemingly substitute a Fort Knox “field trip” and assurances that everything was there.

What a Real Fort Knox Audit Would Require

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Maharrey emphasized that a legitimate audit involves much more than walking through a vault.

A proper independent examination would https://www.moneymetals.com/news/2025/02/21/open-letter-to-president-donald-j-trump-dont-be-fooled-by-the-fort-knox-auditors-003856";>require every bar to be counted and inspected. Serial numbers would need to be reconciled with official records. Gold would need to be assayed to verify weight and purity. The resulting documentation would then need to be published for public examination.

An audit would also address chain of custody and potential encumbrances.

Has any Fort Knox gold been loaned to another entity? Has it been pledged, leased, swapped, or mobilized in currency operations? Does anybody else hold full or partial claims against metal sitting inside the vault?

Without a comprehensive published audit, Maharrey argued, the public simply cannot know.

The $6 Billion Question

That leads to what Maharrey called the “$6 billion question”: Why not simply audit the gold?

He pointed back to 1974, when officials opened the Fort Knox vaults to outsiders. Maharrey characterized that episode as another publicity event rather than the type of rigorous accounting needed to settle the issue.

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The continuing resistance to an independent audit only breeds suspicion, he argued. If a private company refused to audit its books and became hostile whenever somebody suggested doing so, that behavior would hardly inspire confidence.

Money Metals has firsthand experience with what a real bullion audit entails. The Money Metals Depository is https://youtu.be/MEa8VW6LiTM?si=2oUzKSrfWthKwJwA"; target="_blank" rel="noopener">larger than the U.S. Bullion Depository and undergoes both internal and external auditing.

For Maharrey, that should be the standard… verification rather than assurances.

Don't Rely on Washington to Protect Your Money

The two seemingly different topics of the episode ultimately came together around the same theme.

The dollar’s international position is showing signs of strain as the U.S. struggles to preserve demand for Treasury securities. Meanwhile, Washington continues asking Americans to accept assurances about the nation’s gold holdings without the kind of comprehensive public audit that would settle the question.

Maharrey also pointed to the long-running erosion of purchasing power, saying government policy is effectively designed to devalue money by more than 10 percent every five years.

His conclusion was that individuals shouldn’t depend on policymakers to preserve their wealth. Instead, he argued that saving in sound money such as physical gold and silver can provide a way to protect purchasing power from monetary debasement.

The dollar may remain the world’s dominant reserve currency for some time. But as Maharrey put it at the end of the episode, “the dollar is not what it used to be.”

How Do Interest Rates Affect Gold? - Real Rates vs. the Fed Funds Headline - Gold's Record Across Five Hiking Cycles and the TIPS Yield to Watch - Money Metals

Wed, 12 Aug 2026 00:00:00 EST

How do interest rates affect gold? The textbook answer is short.

Gold pays no interest. When rates rise, bonds and savings accounts pay more.

Gold looks less appealing next to them, so the price falls. Similarly, when interest rates fall, bonds and savings gain less value. That tends to make people more interested in hedges against inflation, which drives them to precious metals.

That answer is simple. It is also incomplete.

The Fed raised rates faster in 2022 and 2023 than at any point in four decades. Theoretically, that should have caused gold's spot price to decline drastically.

Gold climbed anyway. It has done the same thing in earlier cycles.

So the real question is not whether rates matter. It is which rates matter, and how much.

This article will explore this question in a way that many others do not. We will talk about how a rate change reaches the gold price, why real rates matter more than the headline number, past hiking cycles, and what to watch from here.

Quick Answer

Why Interest Rates and Gold Move in Opposite Directions

Gold pays you nothing. It earns no interest and no dividend. The gold ounce you buy today is the same ounce in ten years.

Bonds and savings accounts work differently. They pay you to hold them. When the Fed raises rates, they pay you more.

That creates a cost, which economists refer to as "opportunity cost." Every dollar you hold in gold is a dollar not earning interest somewhere else.

Higher rates raise that cost. Lower rates shrink it.

Rates also move the dollar. Higher U.S. rates pull money in from abroad. Foreign buyers need dollars to buy Treasuries, so demand for the dollar climbs. Gold is priced in dollars. A stronger dollar pushes the gold price down.

Put the two together and you get the standard rule. All else equal, rising rates are a headwind for gold. Falling rates are a tailwind.

The problem is that "all else" is rarely ever equal. Additional factors affect the gold price beyond this simple equation, which we will explore further below.

The Three Channels: How Rate Changes Actually Reach the Gold Price

A rate change does not hit the https://www.moneymetals.com/gold-price";>gold price directly. Instead, it travels through three separate paths. Sometimes those paths push the same way. In many cases, they stand in opposition to each other.

Opportunity cost (the yield channel)

Gold competes with every asset that pays a yield. When a Treasury note pays 5%, the ounce in your safe has to gain 5% a year just to keep pace.

That is a high bar to clear. Conversely, if the bond only gains 1% each year, the bar is much lower for gold to clear.

This is the channel most people mean when they say rates drive gold. It is real. On its own, it is also the weakest of the three.

The U.S. dollar (the currency channel)

Gold is quoted in dollars all over the world. Anything that moves the dollar thereby moves the gold price.

Higher U.S. rates tend to lift the dollar. Foreign investors want that yield, and they need dollars to buy Treasuries. The extra demand pushes the dollar up and the gold price down.

One detail matters here. What counts is U.S. rates compared to rates elsewhere. If the Fed hikes and the European Central Bank hikes more, the dollar can still fall. Watch the gap, not the headline.

Risk and credibility (the confidence channel)

This is the channel most articles skip. It often overwhelms the other two.

Rates are a blunt tool. If you raise them fast enough, something will likely break. Several regional banks failed in March 2023 after a year of rapid hikes.

As banks failed, gold enjoyed a sharp rally. That was not only due to the bank failures. Higher rates also raise the government's own interest bill, which raises difficult questions about the national debt. Such economic strain causes additional financial concern for investors, which makes gold even more appealing.

Cuts send a different signal, but it is bullish too. The Fed usually cuts rates because the economy is weakening. Investors who anticipate a downturn often turn to gold.

So one hike can be bearish through the yield channel, but also bullish through the confidence channel. That is why the relationship looks clean on paper and behaves badly in practice.

Nominal vs. Real Interest Rates: The Distinction That Actually Matters

There are two kinds of interest rates. Unfortunately, too many articles about gold mix the two up. That leads to a lot of confusion for investors when interest rates change.

The first kind of rate is the nominal rate. This figure is what you see in a financial headline.

The Fed sets a fed funds target. Your bank quotes an APY. Those are nominal rates.

The real rate is a little different. This figure refers to what you actually earn after inflation.

The real rate is easy to calculate. All you have to do is take the nominal interest rate and subtract inflation. The number you are left with is the real rate.

Here is a plain example. Let's say your savings account pays 4% this year. Over the same year, prices rise 6%.

In this scenario, on paper, you made 4%. In reality, the situation plays out a little differently.

You lost ground at the grocery store. Gas prices became a little harder to manage. Why?

Because your real return was about negative 2%. You might hold more dollars, but there's less they can buy.

Now apply that to gold. Gold's weakness is that it pays no interest. But that weakness only bites when cash and bonds pay a real return. If a Treasury note yields 4% while inflation runs 6%, the note is not beating gold at anything. It is losing purchasing power on a fixed schedule.

This is how gold can climb straight through a hiking cycle. The Fed can raise nominal rates fast. If inflation rises faster, real rates still fall. Falling real rates have historically been good for gold.

The research demonstrates this principle. A 2021 Chicago Fed letter, https://www.chicagofed.org/publications/chicago-fed-letter/2021/464";>What Drives Gold Prices?, found that gold is sensitive to expected long-term real interest rates. A 2019 study in the Journal of International Financial Markets, Institutions and Money found that gold prices respond to real rate changes, and that the effect is strongest during recessions.

So what should you watch? Not the fed funds headline. Watch the yield on 10-year Treasury Inflation-Protected Securities, or TIPS. That yield is the market's live estimate of the long-term real rate. You can pull it free from the St. Louis Fed's FRED database under series DFII10.

When the TIPS yield falls, gold's main disadvantage shrinks. When it climbs, the headwind is real.

What History Shows: Gold During Past Rate-Hiking Cycles

Financial theory is one thing, but hard data is a better thing to examine. The table below shows some of the historical trends that gold followed during rate-hike cycles.

Gold's performance across five U.S. rate-hiking cycles

Hiking cycle	Fed funds rate	Gold at start	Gold at end	Change
1977–80, inflation era	5.5% → 13.4% (annual avg.)	$132 (Jan 1977)	$675 (Jan 1980)	+411%
1980–82, Volcker shock	Peaked near 19%	$675 (Jan 1980)	$315 (Jun 1982)	−53%
2004–06	1.00% → 5.25%	$392 (Jun 2004)	$596 (Jun 2006)	+52%
2015–18	0.25% → 2.50%	$1,076 (Dec 2015)	$1,250 (Dec 2018)	+16%
2022–23	0.25% → 5.50%	$1,948 (Mar 2022)	$1,951 (Jul 2023)	+0.2%

Gold prices are monthly LBMA PM fix averages. Fed funds figures for 1977–82 are annual averages from the Federal Reserve H.15 release via FRED; 2004 onward are FOMC target levels and ranges.

Look at the 1970s first. The Fed more than doubled rates. Gold rose more than fivefold. Nominal rates were climbing, but inflation climbed faster, so real rates stayed deeply negative the whole way.

Now look at the Volcker years. Volcker pushed rates near 19%. That finally drove real rates well above zero, and gold lost more than half its value in two years. This is the one cycle that fits the simple story. It fits because of real rates, not nominal ones.

The three modern cycles are the ones people forget. From 2004 to 2006 the Fed raised rates from 1% to 5.25%, and gold gained about 52%. From 2015 to 2018 it raised rates steadily for three years, and gold still finished higher.

The 2022–23 cycle is the clearest test of all. The Fed raised rates faster than at any point in forty years, from near zero to 5.25–5.50%. Gold started that stretch near $1,948 an ounce. It ended near $1,951. The fastest tightening in four decades moved the gold price by about three dollars.

What does all of this show? Gold rose in four of these five cycles. It fell hard in one, and that was the cycle where real rates went sharply and durably positive.

So the negative link is real. It is also weak, and it breaks often. Rates are one input. They are not the whole equation.

What Else Moves Gold Besides Interest Rates

Rates get the headlines. They are not the only thing setting the price.

Central banks. Governments have been buying gold in size. Official-sector purchases came to 863 tonnes in 2025. That was down 21% from 2024, but it still ran far above the 2010–2021 average of 473 tonnes a year. Poland alone added 102 tonnes. This is steady, slow-moving demand, and it does not care much what the Fed did last month.

Inflation expectations. Real rates already fold inflation in. But a sharp shift in what people expect prices to do can move gold on its own.

Safe-haven flows. Wars, elections, banking trouble, and trade fights all push money toward gold. These moves are fast and hard to predict.

The dollar's role. Some countries are working to settle trade outside the dollar and hold fewer Treasuries. Gold is the obvious alternative reserve asset. This is a slow trend, not a trade.

Supply and physical demand. Mine output grows slowly. Jewelry, industry, and ETF flows all pull on the same limited supply.

Government debt. Rising deficits and interest costs raise doubts about the currency itself. That is a gold story, not a rate story.

The scale here is easy to miss. https://observer.com/2026/04/why-central-banks-are-buying-gold-global-finance/";>Total gold demand passed 5,000 tonnes for the first time on record in 2025, worth about $555 billion.

Here is how to hold it all together. Interest rates matter most at the margin, and over weeks and months. The long-run case for gold is simpler. It comes down to what happens to the buying power of the currency you are paid in.

What This Means for Precious Metals Buyers

None of this is a trading signal. It does shape what you can reasonably expect.

Fed days move the price, not the trend. An FOMC announcement can swing gold a percent or two in an afternoon. Those swings tell you very little about where gold sits a year later. If you watch the price closely, expect noise around meeting dates.

The market prices in cuts before they arrive. Rate-cut cycles have often lined up with strong stretches for gold. But traders position ahead of the decision. By the time a cut is announced, much of the move has already happened. Waiting for the Fed to act usually means waiting too long.

Watch premiums, not just spot. The premium over spot is what you pay above the metal price itself. Retail demand tends to jump around big Fed headlines, and premiums can widen when it does, even if the spot price has not moved. Two people buying at the same spot price can pay different amounts.

Timing is hard. Averaging is not. Buying a set dollar amount on a regular schedule spreads your cost across many prices. It takes the Fed calendar out of the decision. The https://www.moneymetals.com/programs/monthly-program";>Money Metals monthly purchase plan works this way, and you can cancel anytime.

This article is educational information, not investment advice. What makes sense for you depends on your own situation.

Frequently Asked Questions

Not usually. Falling rates lower the cost of holding gold, and that tends to support the price. Cuts also tend to arrive when the economy is weakening, which sends more buyers toward gold. The catch is timing. Markets price cuts in well before they happen, so gold can drift lower on the day the cut actually lands.

Gold has often done well during rate-cutting cycles. Two forces push the same way. Lower yields make cash and bonds less rewarding to hold, and a cut usually signals economic trouble, which lifts safe-haven demand. Neither is guaranteed. From 2024 through early 2026 real yields held near 2% and gold rose sharply anyway.

Gold pays no interest. When a Treasury note pays 5%, holding gold costs you that yield. When the same note pays 1%, it costs you very little. Lower rates shrink that disadvantage. Lower rates also tend to weaken the dollar, and gold is priced in dollars. A softer dollar usually means a higher gold price.

Expect movement, and expect it to be about surprise rather than the decision itself. Traders have already positioned for the expected outcome. What moves gold is the gap between what the Fed does and what the market assumed it would do, plus the tone of the statement and the press conference. A one or two percent swing is common.

Yes. Mining shares track the gold price but stack company risk on top. Miners carry debt, so higher rates raise their borrowing costs directly. They also face labor, energy, and equipment costs. That leverage cuts both ways, and mining stocks often move further than gold in both directions. Physical metal carries no debt, no management, and no earnings risk.

It depends which rate you mean. What matters is the real rate, meaning the nominal rate minus inflation. High nominal rates alongside even higher inflation leave real rates negative, and gold has historically held up well in that setting. High rates that outrun inflation are the harder case. That combination is what ended gold's 1970s run.

Closing Thoughts

So, how do interest rates affect gold? Rising rates raise the cost of holding it. Falling rates lower that cost. But the rate in the headline is not the one that matters most. The real rate is. And even that explains only part of the price.

The 2022–23 cycle made the point. The fastest hikes in forty years moved gold by about three dollars.

Gold's long-run case was never about a single Fed meeting. It is about what a dollar buys ten years from now. Take advantage of gold's security by finding the best precious metals assets for your portfolio.

Precious Metals News & Analysis - Gold News, Silver News from Money Metals Exchange

Silver’s New Era: Supply Deficits Meet Exploding Industrial Demand

From $121 Silver Back to $65

Industrial Demand Remains a Powerful Force

Solar’s Silver Appetite Has Exploded

AI Could Become Another Major Silver Demand Driver

Higher Gold Prices Are Also Affecting Jewelry

Higher Prices Can't Quickly Produce More Silver

A Sixth Consecutive Silver Market Deficit

The Silver Sitting in Vaults Isn't Necessarily Available

Silver Investment Demand Could Strengthen

Medicine Shows Another Side of Silver

From $15 to More Than $70

A Tight Market With Powerful Long-Term Drivers

Gold Tops $4,400, Silver Surges — And Sound Money Scores New Victories

Money Metals to Honor Twin Falls Hero Jordan Salinas with 25-Ounce Silver Bullet Award

Sports Betting the Newest Gen Z Investment Strategy in the War Against Inflation

It’s Impossible to Save

I Bet I Can Save!

Chinese Investment Demand Was Resilient in Q2 Despite Rangebound Prices

Tax Incentives and Disincentives Driving Chinese Precious Metals Markets

Looking Ahead

Maryland, Alaska Leaders Named “Sound Money Legislators of the Year”

Trump Administration Runs Largest Monthly Budget Deficit in Five Years

The Cost of the Debt

Beyond CPI: The Complete Inflation Story -- July 2026

July CPI Data

M2 Money Supply

The Federal Reserve Balance Sheet

National Financial Conditions Index

Conclusion

Dollar Dominance Is Cracking and the Fort Knox Gold Question Won’t Go Away

The Dollar’s Reserve-Currency Advantage Is Under Pressure

Why Washington Didn't Want to Sell Dollars

Japan Can Get Dollars Without Dumping Treasuries

Why Hold Reserves You Can't Freely Use?

Gold Stands to Benefit

Rand Paul Goes to Fort Knox

A Tour Isn't an Audit

What a Real Fort Knox Audit Would Require

The $6 Billion Question

Don't Rely on Washington to Protect Your Money

How Do Interest Rates Affect Gold? - Real Rates vs. the Fed Funds Headline - Gold's Record Across Five Hiking Cycles and the TIPS Yield to Watch - Money Metals

Why Interest Rates and Gold Move in Opposite Directions

The Three Channels: How Rate Changes Actually Reach the Gold Price

Opportunity cost (the yield channel)

The U.S. dollar (the currency channel)

Risk and credibility (the confidence channel)

Nominal vs. Real Interest Rates: The Distinction That Actually Matters

What History Shows: Gold During Past Rate-Hiking Cycles

What Else Moves Gold Besides Interest Rates

What This Means for Precious Metals Buyers

Frequently Asked Questions

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Closing Thoughts