Gold and Silver ETFs Suffer Up to 12% Decline in June, Precious Metals Market Outlook Uncertain

Gold and Silver ETFs Fall Up to 12% in June as Investor Sentiment Weighs on Higher Inflation and US Interest Rates

Gold and silver exchange-traded funds (ETFs) have fallen up to 12% in June so far as concerns around higher inflation, rising US-Iran tensions, and US interest rates have weighed on investor sentiment. The decline in gold ETFs is a significant concern, as the metal's price has dropped more than 22% since the U.S.-Israeli war on Iran kicked off in late February, which was followed by a jump in oil prices.

Spot Gold and Oil Prices Move in Tandem

Spot gold has been closely tied to the price of crude oil, with elevated oil prices accelerating inflation and keeping interest rates higher for longer. Gold is viewed as a hedge against inflation, but higher interest rates tend to weigh on the metal's price. The recent decline in gold through its 200-day moving average has triggered additional selling, as this level is closely watched by some investors.