Precious Metals (METALS) on Solana

President Trump signed an executive order tightening foreign material waiver rules for Pentagon procurement, targeting U.S. dependence on China, which controls roughly 70% of global rare earth production and 90% of processing capacity. The directive creates structural incentives for defense contractors to source rare earths, antimony, and other critical minerals domestically, sending shares of MP Materials, Critical Metals (CRML), USA Rare Earth (USAR), and United States Antimony (UAMY) higher in premarket trading. The Pentagon's existing ~15% stake in MP Materials and new DoD partnerships signal direct government backing for the domestic critical minerals sector.

While the executive order centers on rare earths and antimony for defense applications, the broader policy shift reinforces favorable macro conditions for the entire metals complex, including precious and industrial metals that underpin defense electronics and advanced manufacturing. By systematically reducing reliance on a single foreign supplier for strategic materials, the administration is creating durable demand signals for domestic metals producers across categories — a structural tailwind for metals markets generally.

Gold futures are approaching the $4,000 per ounce threshold — trading at approximately $3,998.80 — while silver prices have also risen, reflecting a broad advance in precious metals markets. The simultaneous gains in gold and silver have drawn renewed attention to hard assets as investors weigh ongoing macroeconomic uncertainty.

Reduced political friction in key metals-producing regions, particularly Peru and Mexico, has eased supply-side concerns that previously weighed on the sector. That combination of higher spot prices and calmer geopolitics is benefiting producers with significant silver and gold byproduct exposure, with Yahoo Finance noting the dynamic as a meaningful tailwind for metals broadly. Gold remains within reach of $4,000, a level that could attract further attention if momentum holds.

Precious metals ETFs delivered substantial outperformance against the S&P 500 over the past year, with the iShares Silver Trust (SLV) surging more than 64%, Invesco DB Precious Metals Fund (DBP) gaining nearly 29%, abrdn Physical Precious Metals Basket Shares (GLTR) returning roughly 34%, and SPDR Gold Shares (GLD) advancing nearly 24% — compared to approximately 22% for the SPDR S&P 500 ETF Trust (SPY). The gains reflect strong underlying demand for gold and silver driven by central bank accumulation, geopolitical uncertainty, and macro hedging flows.

The sustainability of those gains faces a near-term test. By mid-2026, gold had pulled back roughly 15% from its February peak while silver and platinum had declined around 25% from January record highs, partly as U.S.-Iran tensions created sharp volatility after Iran attacked commercial ships in the Strait of Hormuz and American military strikes followed. Despite the turbulence, the World Bank forecasts gold rising approximately 37% in 2026 before a 9% correction in 2027, and silver increasing roughly 76% this year before a similar pullback. JPMorgan projects gold reaching $4,500 per ounce by Q4 2026, citing sustained central bank buying and physical demand as the key supports for the bull case.

After surging 65% in 2025, gold has shed roughly 24% from its late-January peak above $5,400 per ounce, with prices now trading near $4,100. Silver's reversal has been even sharper: following a 148% gain in 2025 that pushed it to $117, the metal has tumbled approximately 49% to around $60 per ounce, leaving it down 16% year-to-date.

The pullback has exposed a regional divide in investor behavior. U.S. holders have pulled $7.7 billion from gold ETFs this year — including $9.3 billion from SPDR Gold Shares alone — while Asian investors have added $12.3 billion and European buyers contributed another $3 billion. The underlying factors that powered the 2025 rally — government debt accumulation, geopolitical tensions, trade disputes, inflation concerns, and questions around Federal Reserve independence — remain in place, leaving open the question of whether the current drawdown represents a correction within a longer-term bull trend or a more durable reversal.

Citigroup has been admitted as a clearing member of London Precious Metals Clearing Limited (LPMCL), the central clearing and settlement infrastructure for the over-the-counter bullion market. The membership enables Citi to provide Loco London settlement services across gold, silver, platinum, and palladium, deepening its participation in the dominant global OTC precious metals trading ecosystem. José Cogolludo, Head of Commodities at Citi, said the move "aligns well with our operating model and our commitment to supporting robust, efficient market infrastructure."

LPMCL Chair James Cressy noted that Citi's addition "demonstrates the openness and transparency of our membership process." For the precious metals market, a major global bank joining the clearing network adds a further layer of counterparty depth and settlement capacity, which can support tighter liquidity conditions and broader client access to Loco London settlement — the benchmark delivery standard underpinning most international gold and silver trading.

OCBC (Oversea-Chinese Banking Corporation) has significantly reduced its end-2026 price targets for gold and silver, citing higher real interest rates, renewed U.S. dollar strength, and increasingly hawkish Federal Reserve expectations. The bank lowered its gold forecast to $4,360 per ounce from $5,100 and cut its silver target to $67 per ounce from $89.50, with both metals expected to be weighed down by reduced demand for non-yielding assets in a high real-yield environment and weaker inflows into exchange-traded funds.

Despite the near-term downgrade, OCBC maintained a positive long-term view, pointing to central bank diversification, geopolitical uncertainty, fiscal concerns, and portfolio-hedge demand as structural supports. The bank noted that a recovery in gold and silver would depend on catalysts such as weaker U.S. inflation, softer labor market data, or a pivot toward more dovish Fed policy, while persistent inflation and strong economic growth could keep real yields elevated and continue to pressure prices.

Gold logged its worst quarterly performance since 2013, falling roughly 14% in Q2 2026 to trade near $3,978 per ounce — well below its January all-time high of $5,586. Silver fared even worse, dropping 22% on the quarter, while platinum shed 21%. The sell-off reflects a sharp reversal in Federal Reserve expectations: markets that earlier anticipated rate cuts in 2026 are now pricing in at least one additional hike by year-end, driven by sticky inflation tied to elevated oil prices from Middle East tensions and rising technology costs.

Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, and a strengthening dollar compounds the pressure by making dollar-denominated alternatives more attractive. Spot gold briefly dipped below $4,000 on July 1 — an 8-month low — as investors awaited remarks from Fed Chair Kevin Warsh for further policy signals. The broad precious metals complex, including the tokenized METALS basket, is absorbing the same macro headwind: a higher-for-longer rate environment that favors yield-bearing assets over hard commodities.

Silvercorp Metals (TSX: SVM) has released updated technical reports for its Gaocheng and Ying mines in China, extending the expected mine life at both operations by reclassifying a large portion of material into higher-confidence measured and indicated categories and into proven and probable reserves. The company noted the extensions come with generally lower grades, making the development story more about volume and mine life than grade upgrades — a signal of sustained silver and base-metal supply from its core Chinese assets.

Alongside the China update, Silvercorp has committed US$196.3 million to advance its Tulkubash and Kyzyltash projects in Kyrgyzstan toward construction, supported by an updated feasibility study. The capital commitment marks a meaningful step in diversifying the company's production base beyond China, adding future silver supply optionality across two jurisdictions. As a producer focused on silver, lead, and related by-products, Silvercorp's mine life extension and geographic expansion reinforce the longer-term supply picture for silver within the broader precious metals complex.