Podcast: Play in new window
It’s been a rough week across the board for precious metals. Gold is down 8.5%, silver off 12.5%, platinum down 10.5%, and palladium sliding 6.75%. Equities are taking hits too, with the S&P dropping 3.8%. Despite the decline in precious metals, the long-term outlook remains bullish due to continued purchases from central banks.
Let’s take a look at where prices stand as of Wednesday, June 10:
The price of gold is down 8.5% this week since we recorded last week, currently sitting at $4,080.
The price of silver is down 12.5%, currently sitting at about $64.
Platinum is down about 10.5% at $1,660 per ounce.
Palladium is down 6.75% sitting at $1,220 — the sister white metal to platinum is actually doing the best out of the metals.
Looking over at the paper markets…
The S&P 500 is now down 3.8% since our recording last week, currently sitting at 7,275 points.
And that’s all due to the dollar being up over the last week — most of which happened on Friday at the market open.
The US Dollar Index is up about 0.5% to around 100.
Dollar Strength Drives Overall Decline
The most immediate catalyst for this week’s metals pullback was a sharp jump in the U.S. dollar index, which broke back above the 100 level — most of the move coming in a single session Friday morning. When the dollar strengthens against other currencies, gold and silver tend to face short-term headwinds, and that’s exactly what we’re seeing.
But context matters. The dollar bouncing above 100 doesn’t mean the longer-term trend has reversed. It’s a reactionary move, likely tied to rising expectations of interest rate hikes. Markets are now pricing in a 70% probability of a Fed hike this year, largely because the Iranian conflict is pushing oil prices higher and re-accelerating inflation. CPI already came in at 4.2% this week, well above the Fed’s target, and PPI is due Thursday.
A Paper Gold Liquidity Event
One of the most important distinctions to understand right now: this selloff is being driven by paper gold leaving ETF markets — not by physical holders heading for the exits. In the last six weeks alone, roughly $2.5 billion has been pulled from gold ETFs as leveraged investors and hedge funds raise cash. That’s a lot of paper, but it’s not the same as a collapse in underlying demand for real metal.
In fact, while paper gold is being sold, central bank buying — particularly from China — remains exceptionally strong. Chinese central bank purchases in March, April, and May of this year were the highest of any month over the past year, exceeding even January 2025’s pace. Sovereign buyers are not panicking. They’re loading up.
This is the classic late-stage liquidity cycle pattern: leveraged money sells what it can (gold, equities, anything liquid) to raise cash, while long-term buyers — central banks, institutions, informed individuals — step in at lower prices. The metals will reverse first when the liquidity squeeze is over.
Tech Euphoria Entices Speculators
With high-profile IPOs on the horizon (SpaceX, OpenAI and others), speculative investors are trimming positions in metals, crypto, and even equities to chase the next potential windfall. Bitcoin is down sharply too — when everything sells off broadly like this, it’s a sign of broad-based capital rotation, not a fundamental problem specific to gold or silver.
This kind of speculative exuberance where investors abandon “insurance” assets has happened before. But it tends not to last.
Real rates are climbing above 2%, which creates a temporary headwind for non-yielding assets like gold. But real rates this high, combined with a 4.2% CPI print and rising oil prices from an active military conflict, point to stagflation. This environment historically resolves in gold’s favor.
Trim Silver, Add Gold
The gold-to-silver ratio is now sitting in the low-to-mid 60s — up roughly 20 points from the January low near 43:1. That’s a significant move, and it has important implications for anyone who built a silver position when the ratio was in the 80s, 90s, or above 100:1.
If you entered silver at those extreme ratios, you’re still sitting on substantial gains measured in gold ounces. Now is the time to act on at least a portion of those gains — not because silver has topped forever, but because the math still strongly favors swapping some silver into gold while the ratio remains in the 60s.
The ratio is more likely to widen toward 80:1 than to narrow back toward 50:1 in the near term. And critically — the sharp reversal points in the ratio tend to be fast and aggressive. We already went from 43:1 to 63:1 in a matter of weeks. If you wait for a “perfect” entry, you may miss the window entirely.
The Gift in The Metals Dip
Gold at $4,100 is 25% off its recent high. Silver at $64 is still roughly double where it was a year ago. Viewed against the backdrop of a multi-year bull market that has seen gold run from $3,200 last summer and silver more than double over the past year, the current pullback looks more like an opportunity than a crisis.
The underlying fundamentals haven’t changed: the U.S. is still running trillion-dollar deficits, debt continues to climb, the Fed will eventually return to easier policy, and central banks worldwide keep accumulating physical gold at a record pace. What’s changed is that leveraged paper holders are getting shaken out — and that’s historically when the best entries appear for long-term physical buyers.
What to Do Now
- If you’ve been waiting to buy physical gold, this pullback is the opportunity. Use staggered entries — buy some now, keep powder dry for $3,800 if it comes.
- If you hold a meaningful silver position acquired at ratios above 80:1, trim at least a third into gold at current levels. Don’t wait for a ratio you may never see again.
- If you’re on the sidelines entirely, recognize that this correction is happening for mechanical reasons — forced selling, tech euphoria, dollar strength — not because the fundamental case for metals has weakened.
Here to Help
The team at McAlvany Precious Metals has a collective 75 years of experience in the precious metals market and is happy to walk through your specific situation at no cost or obligation. Reach us at 800-525-9556.
