Despite escalating geopolitical tensions, gold and silver prices continue to face downward pressure, in a shift that defies the traditional pattern supporting precious metals as safe havens during crises. Gold has fallen roughly 29% from its annual highs, while silver has declined by approximately 50%.
This performance reflects the dominance of macroeconomic factors over market movements, with the US dollar holding above the 100-point level and US Treasury yields rising, reinforcing expectations that interest rates will remain elevated for longer — a development that diminishes the appeal of non-yielding assets such as gold and silver.
Trader positioning reflects the same reality. According to FOREX.com client data, approximately 70% of traders hold long positions on gold, compared with just 30% holding short positions. This indicates that retail investors still anticipate a potential price recovery, even as prices remain below key resistance levels. At the same time, trading activity has been gradually declining since April, reflecting the seasonal slowdown typically seen in summer and signs of market fatigue following a period of sustained losses. Despite this short-term weakness, however, some indicators have begun to emerge pointing to a more influential role in the period ahead.
From a long-term technical perspective, both gold and silver are approaching price zones that have historically served as major turning points for market direction, rather than merely conventional support levels. Gold continues to follow an upward trend line extending over ten years, dating back to 2016, while silver is approaching a price zone that acted as a significant resistance level between 1980 and 2024.
Razan Hilal, a certified market analyst at FOREX.com, said: "Markets are entering a pivotal phase in which long-term structural signals are no less important than short-term macroeconomic factors. Despite the pressures weighing on precious metals in the near term — such as dollar strength and rising Treasury yields — the levels currently being tested have historically coincided with periods of accumulation and market trend reversals. Investors should therefore prepare for continued volatility and understand the role these price zones play in shaping the contours of the next long-term cycle."
Downside risks have not yet dissipated, however. Should gold breach the $3,930 level, this could open the door for a decline toward the $3,400–$3,500 zone, where the 38.2% Fibonacci retracement of the uptrend between 1920 and 2026 converges with a five-month consolidation period during 2025. For silver, a drop below $54 could direct attention to the support zone between $46 and $50, potentially determining the nature of the next phase, which may see buyers return to the market.
Conversely, a resilient US dollar, Treasury yields, and monetary policy — alongside a sustainable resolution to tensions linked to the Strait of Hormuz — could provide the economic environment necessary for a new upward wave to emerge. From a technical standpoint, gold stabilising above $4,400 and silver above $71 could reinforce the likelihood of a return to record levels.
At present, the outlook remains balanced, and the coming months are likely to determine whether current historical support levels will pave the way for a new bull run in precious metals, or whether they represent merely another station in a corrective trend.