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Money Metals News Alert
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September 22, 2025
– Gold and silver markets surged over the last few days, with gold climbing
near record highs near $3,750 per ounce and silver touching $44 in Monday morning
trading.
The rally has been driven primarily by
growing expectations that the Fed will cut rates further this fall.
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Lower interest rates
reduce the opportunity cost of holding non-yielding assets, making both gold and
silver more attractive to investors.
At the same time, a softer
U.S. dollar and declining real yields are providing additional support by lowering
the carry costs of precious metals and boosting their appeal to international
buyers.
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Silver, meanwhile, is getting an extra
boost from its strong industrial demand, particularly in electronics, solar, and
other technologies.
The historically elevated gold:silver
ratio is another factor pointing to silver outperformance going forward.
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In response to these
dynamics, several major banks, including Deutsche Bank, ANZ, and Citi, have raised
their price forecasts for both precious metals, citing bullish scenarios for 2025
and 2026.
Still, risks remain.
Investor profit-taking could trigger near-term pullbacks, especially as valuations
stretch higher.
For now, though, the
momentum remains firmly on the upside, with gold anchored as a store of value and
silver increasingly drawing attention as both a monetary and industrial asset.
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Gold : Silver Ratio (as of
Friday's closing prices) – 85.5 to
1
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How Will the Fed Rate Cut Impact the Gold
Market?
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As expected, the
Federal Reserve cut interest rates by 25 basis points last week. How will this
impact the gold market?
The cut was already priced into the
markets. The real question is: what will the central bank do moving forward?
As it turned out, the messaging coming
out of the Fed was somewhat more hawkish than markets had hoped.
Based on the dot plot projections, the
committee forecast two more cuts this year. However, the outlook for 2026 was more
conservative, with the committee only anticipating one additional cut.
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With the updated dot plot, the median
projection is now for the Fed to trim rates to around 3.4 percent by the end of
next year. In contrast, implied Fed funds futures point to at least two, if not
three, cuts next year, with rates likely to end 2026 closer to 3 percent.
Gold sold off modestly after the rate
cut decision and Powell???s post-meeting press conference. Analysts at Metals Focus
said the consolidation wasn???t remarkable.
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???With the FOMC
statement largely aligning with market expectations, some near-term technical
profit-taking in gold is unsurprising.???
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Beyond the short term, analysts say,
???The macroeconomic and geopolitical backdrop remains supportive of gold investment
and prices,??? and that there will likely be strong buying support with price dips.
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???Buying on dips is
therefore likely to continue, helping to drive the metal to fresh all-time highs
well into 2026.???
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Money Metals also expects further rate
cuts. While the messaging coming out of the FOMC meeting was somewhat
conservative, there will likely be continued pressure from the White House to cut
more aggressively. There is also some division among committee members.
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Trump appointee Stephen
Miran advocated for a half-point cut, and Trump will get to appoint a new chair
next year.
Further softening of
economic data could also speed up the rate of cutting.
Meanwhile, Metals Focus
analysts think persistent inflation pressure will support gold.
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???There is a risk
that inflationary pressures could become more protracted just as nominal interest
rates are falling. The resulting larger decline in real rates should provide an
additional boost to gold.???
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It will be important to pay
attention to real rates moving forward.
When interest rates are higher, there
is an opportunity cost to holding gold or silver when you could own bonds that
generate interest income or stocks that pay dividends.
However, when real interest rates fall
or turn negative, those income-producing alternatives lose their comparative
advantage. In such an environment, the relative cost of holding precious gold and
silver diminishes, making the metals more attractive as safe-haven and
wealth-preservation assets.
Metals Focus expects equities to
continue to push higher in the current market environment, supported by the
stimulative effect of looser monetary policy.
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???Looking ahead, with
rising pressure on the Fed to stimulate growth and reduce financing costs,
confidence in US equities is likely to remain intact. Further gains in US equities
should encourage portfolio diversification, which also tends to favor
gold.???
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With or without rate cuts, the
geopolitical uncertainty will likely continue, at least in the near to mid-term.
Metals Focus notes that geopolitical tensions have "eased somewhat from earlier
this year," but you can't rule out renewed instability.
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"Uncertainty surrounding US economic and foreign policy is also likely to
persist. Taken together, these factors will continue to support the case for
adding gold to asset allocations among institutional investors with a medium- to
long-term outlook."
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One also has to consider
the possibility of a recession.
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While the mainstream has pretty much
written off an economic downturn, the reality is that this debt-riddled, bubble
economy has not cleansed the malinvestments and misallocations created by the
monetary malfeasance in the wake of the Great Recession and during the pandemic.
A downturn would undoubtedly provoke
the Fed to cut rates more quickly – likely to zero. It would also likely
mean a resumption of quantitative
easing. This would result in ramping up inflationary pressure even higher than
it already is.
All in all, the move toward looser
monetary policy is predominantly bullish for gold (and silver).
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This week's Market Update was
authored by Money Metals Contributing Writer Mike Maharrey.
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