Gold and silver prices rallied after the United States and Iran confirmed a ceasefire deal, according to precious metals analysts at Heraeus. The rally followed a week of gold price declines that persisted even as the ceasefire appeared finalized, with confirmation of the agreement triggering gains across precious metals and equities. Elevated inflation continues to pressure the metals, with the CPI rising 4.2% year-on-year in May—above both the Federal Reserve's target rate range of 3.50% to 3.75% and the 2-year Treasury yield of 4.05%—while markets price in interest rate increases to combat price rises.
US-Iran Ceasefire Drives Precious Metals Rally
Gold continued to decline last week even after the US-Iran ceasefire appeared to be finalized, but precious metals rallied on confirmation of the deal, Heraeus analysts noted in their latest update. Since news of the ceasefire agreement broke on 14 June, the silver price rallied back above the $70/oz level. Spot gold hit a session high of $4,369.66 on Monday morning, last trading at $4,364.84 for a gain of 3.47% on the session. Spot silver last traded at $70.880 per ounce for a gain of 4.18% on the daily chart.
Inflation Data Supports Rate Hike Expectations
Core CPI was up by 2.9% and although the month-on-month core reading of 0.2% was under the 0.3% estimated, the market is continuing to price in interest rate rises to combat these price rises, according to Heraeus. While the Federal Reserve is not expected to change the headline rate during the 17 June FOMC meeting, the probability of at least one rate hike by the 9 December meeting is currently hovering at around 60% as of 15 June. During the 17 June FOMC meeting, the Fed will produce a Summary of Economic Projections that will give some clarity on how it is viewing the implications of the current spike in prices, the analysts noted.
Central Banks Continue Gold Accumulation
Central bank demand has remained strong as the gold price has declined. The People's Bank of China (PBoC) added 9.95 tonnes of gold in May, marking 19 consecutive months of accumulation, the analysts said. This brings China's total reserves to 2,331 tonnes, up by 23.6 tonnes year-to-date. China's reserves are the fifth largest in the world, behind the US, Germany, Italy and France.
Central banks also flipped back to being net buyers in April after March's strong selling. Poland was the largest buyer of gold in April, having bought 14 tonnes in the month, Heraeus wrote. To the end of April, Poland had bought 45 tonnes of gold this year, the most of any country.
Minera Frisco Advances Mexican Silver Production
Minera Frisco is advancing a new silver operation at Ocampo Mining in Durango province after having received environmental permits in November 2025, Heraeus analysts said. The project is expected to be online by the end of this year and begin contributing ore production by Q1'27. The first phase production target for this mine is 30 million silver-equivalent ounces.
Minera Frisco is also restarting the San Felipe project in Baja California in Northwestern Mexico. Scheduled to be online by the end of June 2026, the project is expected to incrementally increase Minera's production from H2'26, the analysts noted. These moves come as many projects are struggling to get approval following Mexico's mining law changes that were introduced in 2023, which made the permitting and concession process stricter and slower. Minera Frisco's silver output was 1.51 moz in Q1'26, up 45% year-on-year from 1.04 moz in Q1'25. Its total silver production for 2025 was 4.27 moz.
Silver Faces Dual Headwinds from Rates and Industrial Demand
The expectation of higher-for-longer interest rates is acting as a headwind for silver. A high CPI number, 4.2%, has entrenched the market view of a higher-for-longer interest rate environment, Heraeus said. While silver is viewed as a precious metal, along with gold, it is also much more exposed to industrial demand, the analysts pointed out. The current higher interest rate expectations suppress demand for silver from an investment perspective, and worsening economic conditions are likely to dampen industrial demand.
FAQ
What triggered the gold and silver rally on 14 June?
Gold and silver prices rallied after the United States and Iran confirmed a ceasefire deal on 14 June. Spot gold hit a session high of $4,369.66 and silver rallied back above $70/oz following the ceasefire confirmation.
How much gold did China's central bank add in May?
The People's Bank of China (PBoC) added 9.95 tonnes of gold in May, marking 19 consecutive months of accumulation. This brings China's total reserves to 2,331 tonnes, up by 23.6 tonnes year-to-date, making it the fifth largest holder globally.
What is the probability of a Federal Reserve rate hike by 9 December?
As of 15 June, the probability of at least one rate hike by the 9 December meeting is hovering at around 60%, according to Heraeus analysts. This follows the CPI rising 4.2% year-on-year in May, above the Federal Reserve's target rate range of 3.50% to 3.75%.
