For the week through Aug 2, international precious metals markets stayed strong. Spot gold settled at $2,458.20 per ounce, up about 1.2% on the week, marking a third consecutive weekly rise. Spot silver outperformed, breaking above the key psychological level of $35 to close at $35.62 per ounce, up 4.8% for the week—the strongest level in nearly eight years since 2013.

This Week's Gold and Silver Market Review

Early in the week, gold traded sideways around $2,410 before gaining ground on dovish remarks from Fed officials. On Wednesday, the Fed chair hinted at "possibly two rate cuts this year" in public comments, quickly boosting expectations of monetary easing. The dollar index retreated from a four-month high, and gold buying surged. Friday's July nonfarm payrolls data came in slightly below expectations, further reinforcing rate-cut bets. Gold briefly touched $2,462 before some profit-taking late in the session, eventually holding near $2,458.

Silver moved even more sharply. Driven by surging global photovoltaic demand and supply disruptions at major silver mining regions, silver jumped 2.6% on Thursday, breaking above the $35 integer level. It extended gains on Friday, hitting a weekly high of $35.82—the strongest since June 2013. Silver is now up over 35% year-to-date, far outperforming gold.

Driver Analysis

Rising Fed Rate-Cut Expectations

The market's core logic this week remained the Fed's policy path. With the U.S. July ISM manufacturing index contracting for a fourth straight month and nonfarm payroll growth slowing, market pricing for a September rate cut rose from 70% a week ago to 92%. Rate futures indicate total cuts of more than 50 basis points this year. Lower rates reduce the opportunity cost of holding non-yielding gold, providing major support for gold and silver.

Softer Dollar and Lower Treasury Yields

The dollar index fell 0.9% this week to close at 101.5, a four-month low. Meanwhile, the 10-year Treasury yield dropped from 4.05% to 3.87%, and falling real rates significantly boosted gold's appeal. Currency markets saw clear flows into the euro and yen, dimming the dollar's safe-haven status, while gold became the preferred tool for hedging currency risk and geopolitical uncertainty.

Industrial Demand and Supply Deficit Support Silver

Silver's outperformance over gold rests on solid industrial demand. As the global energy transition accelerates, photovoltaic industry demand for silver is growing at about 8% per year. According to the Silver Institute, the 2026 silver supply deficit is projected to reach 230 million ounces, marking the fifth consecutive year of deficit. Additionally, inventories at major Asian silver processing plants continue to fall, London Metal Exchange silver stocks hit historical lows this week, and the spot market shows signs of tightness.

Market Views and Outlook

On the technical side, gold has moved above the key congestion zone at $2,450, with the daily MACD forming a golden cross above the zero line, indicating solid short-term momentum. Key resistance lies at $2,480 and the $2,500 handle, while support sits at $2,420 and $2,380. After breaking above $35, silver opens room toward the 2012 high of $37.5, but after consecutive gains, the daily RSI has entered overbought territory, posing a short-term pullback risk.

For next week, multiple factors will likely interact. Key events to watch include:

  • U.S. July CPI inflation data (released Thursday); continued cooling would strengthen rate-cut expectations.
  • The Fed chair's semi-annual congressional testimony (Tuesday and Wednesday); any hints on policy pace could trigger volatility.
  • U.S. retail sales data (Friday) to gauge the degree of economic cooling.
  • Global central bank monthly gold reserve updates; several emerging-market central banks have been steadily adding gold.

Overall, the macro environment for precious metals remains favorable: the Fed is about to start a rate-cutting cycle, geopolitical uncertainties persist, and central bank gold purchases continue amid de-dollarization. However, investors should also be wary of a technical correction after overbought conditions, as well as a possible hawkish repricing if inflation data surprises to the upside. For medium- to long-term allocators, gold and silver remain in a bull market channel.

Conclusion

This week's strong weekly close for gold and silver sets a positive tone for August. Gold has established a foothold above $2,450, and silver has opened new upside after breaking $35. Next week's U.S. CPI data and Fed officials' remarks will be key guides for short-term direction. Ruihe Precious Metal will continue to track the latest prices and help you seize every important moment in the precious metals market.