Gold and silver have erased their year-to-date gains after a sharp selloff in precious metals, reversing a powerful early-year rally that had been driven by inflation hedging, geopolitical risk and central-bank demand. The decline marks a significant shift in market positioning as investors reassess the outlook for U.S. interest rates and the opportunity cost of holding non-yielding assets.
Comex gold settled at $4,108.20 per troy ounce on June 10 after falling 3.56% in a single session, its steepest one-day decline since March. The move extended gold’s losing streak to four sessions and left the metal down more than 8% over that period. Spot gold briefly fell to $4,022.09 on June 11, its lowest level since November 2025, before rebounding above $4,090 as traders looked for support near the psychologically important $4,000 level.
Silver also suffered a sharp reversal. Comex silver settled near $64.60 per ounce after declining for four consecutive sessions, leaving it down more than 12% over that stretch. The metal is now far below its January peak above $115 per ounce, reflecting a collapse in speculative momentum after one of the most volatile precious-metals rallies in recent years.
Rate expectations pressure metals
The main driver of the selloff has been a rapid repricing of U.S. interest-rate expectations. Stronger economic data and renewed inflation concerns have reduced expectations for Federal Reserve rate cuts and increased the probability that policymakers may keep rates elevated for longer. Higher Treasury yields and a firmer dollar typically weaken demand for gold and silver because both metals offer no income and become less attractive relative to bonds and cash.
The shift has been especially damaging because precious metals entered the month with crowded bullish positioning. Gold had benefited from central-bank buying, geopolitical hedging and persistent demand from investors seeking protection against currency debasement. Silver had rallied even more aggressively, supported by both monetary demand and expectations of tight industrial supply. When rate-cut expectations reversed, those long positions became vulnerable to liquidation.
The selloff also shows that inflation alone is not always positive for gold. While gold is often viewed as an inflation hedge, it can fall when inflation raises expectations for tighter monetary policy. That is the market setup now: investors are concerned about price pressures, but they are also pricing higher real yields, which reduce the relative appeal of holding precious metals.
Market implications broaden
The reversal has implications across commodities, equities and portfolio allocation. Gold and silver had been among the strongest-performing macro assets earlier in the year, offering diversification while equities remained concentrated in technology and artificial intelligence-linked stocks. Their decline weakens the case for near-term momentum in precious metals and may force funds to rebalance exposure after a crowded rally.
For miners and metals-linked equities, lower bullion prices can pressure margins and investor sentiment, especially for companies that had benefited from expectations of sustained high prices. Silver producers may face additional volatility because silver is both a precious metal and an industrial input, making it sensitive to shifts in risk appetite and manufacturing expectations.
The decline does not eliminate the longer-term support case for precious metals. Central-bank buying, geopolitical uncertainty, fiscal deficits and concerns over sovereign debt remain structural factors that could support gold. Silver may also retain industrial demand from solar, electrification and electronics markets. However, the immediate price action shows that those themes can be overwhelmed when yields rise and investors unwind leveraged positions.
For now, the key market levels are clear. Gold needs to hold the $4,000 area to avoid a deeper technical breakdown, while silver must stabilize after its sharp retreat from January highs. Until rate expectations soften or ETF and futures demand recover, precious metals are likely to remain under pressure despite their longer-term strategic appeal.