The precious metals market in 2026 is undergoing a profound stress test. In the first half of the year, the international gold price experienced a deep correction after hitting a record high; in August, it rebounded strongly under the resonance of multiple bullish factors, with the international gold price rising by as much as 7.28% in a single week, the largest weekly increase in the past six months. Behind the violent price fluctuations is a fundamental reshaping of gold pricing logic. Understanding this reshaping process is the key for traders to establish rational market understanding.

1. Reconstruction of the pricing framework: from real interest rates to US dollar credit

In the traditional gold analysis framework, gold prices have a significant long-term negative correlation with U.S. real interest rates. However, this framework is being broken. Sun Fukun, deputy general manager of Huayuan Futures, pointed out that after the Russia-Ukraine conflict in 2022, Western countries froze the assets of the Russian Central Bank, and the global market began to re-examine the safety of U.S. dollar assets. The global central bank's gold purchasing logic has shifted from investment income to reserve safety. The influence of the asymmetric gold purchasing behavior of "the lower the price, the more holdings" has surpassed the traditional real interest rate factor.

The price of gold no longer simply fluctuates around US dollar interest rates, but has gradually become a strategic allocation position under the global credit changes. Even if the high interest rate environment continues, the central bank's strategic holdings increase and de-dollarization process will still provide strong support for gold prices. The current pricing framework of precious metals is being reconstructed - factors such as the direction of the Federal Reserve's monetary policy, geopolitical and energy transmission, the central bank's continued gold purchases, and sovereign credit risks are intertwined. The pricing anchor of gold is switching from real interest rates to multiple logics such as US dollar credit hedging and de-dollarization. The Shenwan Futures research report also pointed out that the impact of gold on real interest rates has gradually become passivated, and US dollar credit repricing has once again returned to be the core pricing anchor of gold.

2. The Federal Reserve’s policy path: the game of expected differences

The Fed's policy expectations are the core variable driving short-term fluctuations in gold prices. At the end of July, the Federal Reserve's FOMC meeting announced that interest rates would remain unchanged, but three officials voted against and supported a 25 basis point increase in interest rates. This was the first time since 2016 that three unanimous objections had occurred.

The real turning point came on August 7 - the U.S. non-farm payrolls fell by 23,000 in July, the first decline since February, while the market had expected an increase of 80,000. The shift from increase to decrease in non-agricultural data not only reduced the Fed's motivation to raise interest rates, but also significantly increased market expectations for an interest rate cut. The subsequently released US CPI data for July cooled down slightly, rising 3.4% year-on-year, down slightly from the previous value of 3.5%. The market's expectations for the Federal Reserve to raise interest rates have cooled down, which may continue to push gold to maintain a strong trend in the short term.

But the decline in the probability of interest rate hikes does not mean that the market has entered into interest rate cut trading. Some analysts pointed out that the Federal Reserve's policy tone of "maintaining high interest rates for longer" has not been fundamentally reversed, and the market is still in the long-short game stage. Analysts recommend that investors pay close attention to the three core variables of geopolitical situation, inflation data, and Federal Reserve policy.

3. Geopolitics: From “risk aversion pulse” to “structural variables”

Geopolitical risk is another important driver of gold prices. Since 2026, the situation in the Middle East has continued to be tense - the conflict between the United States and Iran revolves around the passage of the Strait of Hormuz, which has a profound impact on global energy supply and financial markets.

It is worth noting that the transmission path of geopolitics to gold is changing. The traditional chain is "geographic conflicts raise oil prices - push up inflation expectations - strengthen expectations for interest rate hikes - suppress gold prices." Rising oil prices may be negative for gold. At the end of July, the situation between the United States and Iran became tense again, but the rise in oil prices did not suppress the price of gold. Gold was obviously "desensitized" to oil prices - this is also an important signal for the stabilization of gold prices. In the medium and long term, the market focus will return to gold's main line of hedging the credit risk of the US dollar.

The World Bank expects gold prices to continue to be supported by safe-haven demand and continued central bank gold purchases. In the context of frequent geopolitical risks, gold has gradually become the new bottom position in the multi-polar era.

4. Central Bank’s Gold Purchase: Strengthening of Structural Supporting Power

The gold purchasing behavior of global central banks is the most important structural force supporting gold prices in recent years. According to data from the World Gold Council, the total global gold demand in the first half of 2026 was 2,522 tons, with the demand reaching a record high of US$380 billion. In the second quarter, global central banks net purchased 289 tons of gold, a significant increase from the 57 tons in the first quarter, a year-on-year increase of 62%, and a record high in the second quarter.

The actions of the People's Bank of China are particularly striking. As of the end of July 2026, China's gold reserves reached 76.08 million ounces (approximately 2366.35 tons), with an increase of 640,000 ounces (approximately 19.91 tons) that month, marking the 21st consecutive month of increasing gold holdings. The Bank of Korea has restarted gold purchases for the first time in 13 years. The global head of commodity research at Standard Chartered Bank said that central bank gold purchase demand, geopolitical uncertainty and the need for asset allocation diversification remain strong. The "slow variable" of central bank gold purchases is continuing to drive up the gold price center.

5. Silver: Resonance of Dual Attributes

Compared with gold, silver has performed more prominently in this round of rebound. Silver has both safe-haven and industrial properties. Driven by the acceleration of the global energy transition, silver's industrial demand in photovoltaics, new energy and other fields has provided additional support for prices. Because of its irreplaceable conductivity and stability, silver has become a key material that is difficult to bypass in the green energy transformation. The World Silver Association predicts that the silver market will face a sixth consecutive year of structural shortages in 2026.

Silver's "dual attributes" determine that its price elasticity is usually higher than that of gold - it is driven by both the financial market and the physical commodity market.

6. Market divergence: cognitive rifts

The gold market in 2026 will not be easy to grasp. So far, the return rate of gold prices this year has been close to zero, but the cumulative increase in the past year is still more than 1,000 US dollars. A survey of 16 professional analysts conducted by the London Bullion Market Association in July showed that analysts’ forecasts for gold prices at the end of 2026 range from US$3,879 to US$5,100; the most pessimistic target of individual analysts is US$3,450 per ounce, and the most optimistic target is as high as US$7,150 per ounce.

The differences between institutions show the "fragmentation" of gold pricing logic - the short-term and long-term logics are pulling in opposite directions in stages, amplifying price shocks. The originally unanimous "optimistic" voices began to diverge, and many institutions lowered their target prices for gold.

7. From market awareness to transaction execution

The value of understanding the above market cognitive framework is that it helps traders understand "why prices move" rather than providing precise buy and sell signals. Analysts interviewed generally believe that the pattern of gold and silver prices fluctuating in the short term and rising in the medium and long term has not changed. As U.S. inflation gradually falls, macroeconomic negatives continue to weaken, U.S. bond real interest rates have limited room for upward movement, and the global de-dollarization process advances, the gold "bull market" will continue.

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Conclusion

Price fluctuations in the precious metals market are essentially the projection of macro logic at a specific point in time. U.S. dollar credit, central bank gold purchases, and geopolitical structuring—these forces together form the underlying framework for gold and silver price trends. Understanding these logics does not mean being able to accurately predict prices, but it can help traders maintain a clear cognitive direction amid market fluctuations.