Getting Gold Wrong: Gold And Silver Price Analysis
Craig Hemke

Geopolitical Tensions And Gold Silver Market Reaction

The initial reaction to the U.S war on Iran has been to sell treasuries and buy the dollar in a market expectation that higher crude oil prices will bring inflation and higher interest rates from the Federal Reserve. This analysis is dead wrong.

But "the market" has adopted this thinking over the past week, and precious metal prices have been hammered. Is the downward price pressure justified? Only if you see the world in a vacuum—like a pre-programmed HFT trading algorithm. If you're an actual thinking human being, you might see it differently.

That's not to say there won't be a short-term inflationary impact. There almost certainly will! However, no one should be under any illusion that long-term U.S. fiscal and monetary policy has changed. As we laid out in our 2026 forecast, the Trump administration pivoted away from austerity and budget cuts in 2025 and toward the promotion of economic growth. "They're going to run it hot" is the shorthand most analysts use for these expectations. If you missed our annual forecast back in early January, here is the link:  

Federal Reserve Policy Inflation Expectations

Nothing about the events of the past ten days changes this forecast. In fact, the past ten days of geopolitical strife have only served to accentuate it. While higher oil prices impact nearly every sector of the economy, the uncertainty and inflation attendant to higher oil prices will almost certainly lead to slower economic growth. Just last Friday, the U.S. reported massive job losses for the month of February, and the recent economic data has been so poor that the Atlanta Fed has had to trim their Q1 GDP estimate by over a third. And we still have over six weeks of data left to consider before the official Q1 GDP numbers are released. Could actual "growth" in Q1 come in as negative as the recent employment reports?

Evolution of Atlanta Fed GDPNow real GDP estimate for 2026: Q1 

As such, with the U.S economy already on shaky ground, the war with Iran only makes it worse. The market infers that the Fed will hike rates to control expected inflation, and this is the opposite of what will happen. Instead look for the Trump Fed to begin cutting rates by summer. In fact, they may even cut faster and deeper than analysts and economists currently expect.

Gold Price Technical Analysis And Trends

This leads to the conclusion that the initial price reactions in gold and silver are all wrong too. We've been told that the precious metals are falling in price due to the expectation of higher interest rates. So what happens when "the market" figures out that rates are far more likely to be cut instead?

To my point: I'm expecting another major and tradable low here, either this week or next. On the chart below, you can see that the spot gold price has steadily progressed higher over the past year, often finding support at/near its 20-day moving average. It's doing so again as I type on Monday, March 9.

Gold - Daily Candlestick Chart

Why Fed Rate Cuts Could Drive Precious Metals Higher

You can see this on the weekly chart too. Since the breakout above $2100 two years ago, the gold price has moved consistently higher in a steady pattern of 20% gains, followed by 2-4 month periods of consolidation. After the latest run to all-time highs that concluded in late January, price is once again in a consolidation phase. The next breakout, when it begins as soon as next month, should take price well past $6000.

Gold - Weekly Nearest Candlestick Chart

Physical Gold And Silver As Protection

In the end, the recent price action presents opportunity. Let's call it a market inefficiency. The knee-jerk price reaction in gold and silver that followed the onset of the U.S. war on Iran has no basis in reality. Instead of hiking rates later this year, the Fed remains on track to cut, print, and monetize. As it has always been, your protection against this madness is the acquisition of physical precious metal. Use this market inefficiency to your advantage and acquire more today.

 

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.

 

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