Relying on the CD Markets cross-cyclical macro database, the FOMC historical decision-making retrospective model and the global precious metals supply and demand monitoring system, we cross-verify the four main lines of the Federal Reserve policy game, US dollar liquidity pricing, geopolitical shocks in the Middle East, and gold and silver supply and demand fundamentals to form a unified and self-consistent judgment on large categories of assets. Relying on the macro pricing framework that the entire site has been cultivating for more than ten years, we achieve two-way verification of the logic of the policy side and the commodity side, and clearly distinguish short-term price disturbances from long-term structural trends.

Unprecedented divisions within the Federal Reserve + political pressure from the White House directly boosted tightening expectations, forming the core underlying driver of the short-term downturn in gold and silver

At the second FOMC meeting chaired by Warsh, three members supported an interest rate increase, which was the most serious policy disagreement in the early days of the new Fed chairman after 1970. Only Burns's first meeting in 1970 equaled the level of opposition, and Volcker's second meeting only reached 4 dissenting votes. In Powell's early years, resolutions were unanimously passed in multiple rounds, and the Fed's policy consistency significantly collapsed. This internal tear is not an isolated phenomenon. It is deeply bound to and mutually confirmed by two major external variables:

Inflation and fundamental data support hawkish stance
Energy continues to rise due to the conflict in Iran in the Middle East, AI expansion has raised corporate production costs, and inflation is still short of the 2% target. These are the core basis for the three committee members to advocate raising interest rates. Warsh himself also clearly anchored the rigid policy response function: under the premise of full employment and equilibrium, rising inflation will tighten, and only loosening will occur if inflation continues to fall, which does not cater to Trump's appeal for interest rate cuts. Trump publicly blamed high interest rates on the "politicized committee" and admitted that Warsh's personal preference was to cut interest rates in an attempt to exert external political pressure. However, core Fed officials still anchored on price data, and the game of policy independence intensified the market's pricing of continued high interest rates.

The “no forward guidance” strategy amplifies expected fluctuations, and September is the turning point for market-wide pricing.
After taking office, Warsh gave up the pre-emptive interest rate path guidance, coupled with the strengthening of internal hawkish voices, the interest rate futures market priced in a probability of raising interest rates by 25bp in September, exceeding 60%. This set of tightening expectations is directly transmitted to the precious metals market, forming a complete logical chain: geopolitical factors push up oil prices → the risk of an inflationary rebound rises → FOMC hawkish dissent increases → the market bets on the Federal Reserve to raise interest rates → real interest rates and the US dollar strengthen simultaneously → gold’s safe haven premium is diluted. This is fully confirmed by the feedback from Deutsche Bank and Reuters polls: the current gold price plunged 22% from the historical high of US$5,595 at the beginning of the year, recording the worst quarterly performance since 2013. The root cause is not the collapse of gold's own fundamentals, but the suppression of liquidity caused by the repricing of the Federal Reserve's tightening expectations.

The geopolitical conflict in the Middle East has a "reverse hedging effect", and the US dollar diverts safe-haven funds, further amplifying the short-term adjustment pressure on precious metals.

Under conventional logic, the geopolitical crisis is bullish for gold, but the current special market environment has formed a reverse transmission, perfectly following the main line of tightening by the Federal Reserve, and the double negative resonance has suppressed gold and silver prices. The two clues confirm each other: the war in Iran continues to push up crude oil prices, on the one hand, it strengthens the stickiness of US inflation and consolidates the hawkish stance of the Federal Reserve; on the other hand, the United States, as a net energy exporter, benefits from high oil prices, and its economic resilience exceeds expectations, and funds turn to the US dollar as a safe-haven asset. There has been a clear shift in market hedging behavior: the EURUSD risk reversal indicator shows that the US dollar’s ​​safe-haven appeal has rebounded significantly, and investors no longer rely solely on gold to hedge geopolitical risks.
This forms a closed-loop negative chain: conflict in the Middle East → rising oil prices + strengthening U.S. economy → strengthening U.S. dollar + rising expectations of interest rate hikes → safe-haven demand for gold is diverted and prices continue to be revised downwards. Corresponding cross-validation at the market data level: Reuters lowered its annual gold price forecast for the first time in 11 quarters. The median gold price forecast was revised down to US$4,509 per ounce in 2026, and to US$4,610 in 2027. The industrial attributes of silver are coupled with liquidity suppression, and the average price forecast in 2026 was simultaneously lowered to US$72. Commerzbank lowered its gold and silver targets for the second time in two months. The year-end gold price forecast was lowered from US$4,800 to US$4,500, and the silver price was lowered from US$80 to US$67. Major institutions simultaneously revised their expectations. In essence, they are consistent pricing feedback for the combination of "high Federal Reserve interest rates + strong US dollar".

Short-term liquidity suppression will not change the foundation of long-term gold allocation. The Fed's forward policy cycle will reversely drive the recovery of gold prices, and the logic is two-way and self-consistent.

The CD Markets global macro research team deduced through the cross-asset cycle model and found that there is an obvious overdraft in the pricing of short-term interest rate hike expectations. The current market's bets on the Fed's continued tightening are too extreme. Future inflation data and the Fed's policy shift will complete the restoration of precious metal valuations. Short-term negatives and long-term positives form a complete hedging argument:

There is a clear expectation of an inflection point in the Fed’s policy cycle
The benchmark models of mainstream institutions unanimously predict that U.S. core inflation will not continue to exceed the 2% matching range. The Federal Reserve is likely to maintain the interest rate range of 3.50%-3.75% during the year. September is more of a data verification window rather than a landing point for interest rate increases; if inflation reaches the target in the spring of 2027, the Federal Reserve will start an interest rate cut cycle in the middle of the year. Once tightening expectations are falsified and interest rate cut expectations are revived, the decline in real interest rates will directly open up the upside space for gold. Deutsche Bank has clearly given a judgment that the gold price will return to US$5,000 in 2027, which is highly consistent with the conclusion of our cycle deduction.

The three major structural benefits of global reserves, debt, and de-dollarization serve as a hedge against short-term liquidity impacts.
The short-term strength of the U.S. dollar and expectations of interest rate hikes are only cyclical disturbances, while gold's long-term support logic is solid and deeply tied to the geopolitical and fiscal background. The demand for global de-dollarization and reserve security has heated up, and the trend of central bank gold purchases remains unchanged, forming the core long-term support for gold prices. India's tariff hikes and high gold prices suppressing the demand for physical jewelry are only short-term fluctuations and do not affect the mid- to long-term allocation logic. The sovereign debt risks of developed economies combined with the trend of global reserve diversification further highlight the unique advantages of gold having no credit risk and independent value preservation. Multiple structural positives offset short-term tightening negatives, forming a complete closed loop of "short-term liquidity suppression and long-term fundamental support".

The dual attributes of silver amplify fluctuations, simultaneously undertake the Federal Reserve cycle and the logic of global industrial demand, and form layered confirmation of the gold view.

Silver is bound to both the financial attributes of precious metals and the attributes of industrial commodities. Its trend follows gold and is affected by the Federal Reserve interest rate and the U.S. dollar cycle, and is additionally constrained by global manufacturing and new energy demand. This further improves our overall asset pricing system:
Short-term dimension: global industrial activity is weak, demand from the photovoltaic industry is weak, and the Federal Reserve's tightening expectations are coupled with the Fed's tightening expectations. The price adjustment of silver is greater than that of gold, and institutions have lowered expectations deeper;
Long-term dimension: The global silver supply pattern continues to be tight. The long-term expansion of the AI, electric vehicles, and photovoltaic industries will stabilize the bottom of industrial demand. Even if the pace of industrial recovery is slow, it can also limit the downside space for silver.
The hierarchical judgment of silver confirms our core conclusion: the short-term fluctuations of precious metal assets are completely dominated by the Federal Reserve's monetary policy cycle, and the industrial attributes only amplify the amplitude of fluctuations, and cannot reverse the long-term upward trend of gold dominated by reserves, debt, and de-dollarization. The views of the two varieties of gold and silver support each other.

CD Markets site-wide research summary

Most institutions on the market are accustomed to interpreting the Federal Reserve policy and precious metals prices separately, focusing solely on interest rate meetings or gold price supply and demand, making it difficult to open up cross-market transmission links; while CD Markets relies on the unified macro pricing model of the entire site to achieveDisagreements within the Federal Reserve → Inflation expectations → US dollar trends → Geographical capital flows → Gold and silver supply and demandThe entire chain is cross-verified, allowing the policy, geographical, and product logic to support each other and make the loop self-consistent. Standing at the current multi-variable game point, it is not advisable to over-buy gold and silver in the short term. We need to focus on waiting for the release of the Federal Reserve's inflation and employment data in September to verify whether the interest rate hike expectations are overdrafted; looking at the 2-4 year cycle, the three major structural dividends of high government debt, global reserve diversification, and weakening US dollar credit have not been destroyed. The 2027 interest rate cut cycle is expected. The allocation value of precious metals has a clear safety margin. Short-term price corrections will open a mid- to long-term layout window.