Gold remains near $4,700 and silver above $80 as hot CPI and Iran war drive safe haven bid

Spot gold traded near $4,706 an ounce in early trade on Wednesday, after slipping from a recent high of around $4,747 at the start of the month, while silver traded as low as $80 an ounce. Silver rose more than 6% to $85.85 on Monday, but fell more than 2% on Tuesday due to the strengthening US dollar. Both metals remain well above year-ago levels and continue to draw support from hotter than expected US inflation, the ongoing conflict between the United States, Israel and Iran and steady central bank purchasing.

Hot CPI Print: April US consumer inflation came in at 3.8% year on year, above the 3.7% forecast and the highest level since May 2023. The key rate also beat expectations at 2.8%. The readings have pushed Treasury yields higher and traders now project a Federal Reserve rate cut by the end of the year, with the market pricing in a more than 70% chance of a rate hike by April 2027.

Geopolitical risk premium: The conflict in the Middle East has kept oil prices above $100 a barrel and strengthened the safe haven case for gold and silver. The Strait of Hormuz is effectively closed, and President Trump has called for a ceasefire on “massive life support” to Iran after the US rejected Tehran’s latest peace offer. President Trump is in Beijing this week for a high-stakes summit with President Xi Jinping, where Iran, Taiwan, AI and nuclear weapons are on the agenda.

Record Q1 demand value: According to the World Gold Council, total gold demand in the first quarter of 2026, including counter activity, reached 1,231 tonnes, an increase of 2% year-on-year. The value of that demand increased 74% to a record $193 billion as the average price of gold rose sharply. Demand for bars and coins increased 42% year over year to 474 tonnes, the second highest quarter on record. Demand in China increased 67% year over year to a record 207 tonnes, significantly exceeding the previous quarterly record of 155 tonnes set in the second quarter of 2013. Central banks added a net 244 tonnes in the quarter.

January’s peaks are still in sight: gold reached an all-time high above $5,400 an ounce in late January 2026, before recovering during February and March on the strength of the US dollar and a sharp rise in real yields. Silver hit its nominal record close of $121 an ounce on January 29, 2026. Both metals are now trading well off those peaks, but continue to outperform on a year-to-date basis.

Silver Industrial Story: The gold-to-silver ratio is hovering around 55, near multi-year lows, reflecting strong relative outperformance of silver due to several consecutive years of supply shortages, rising industrial demand from solar panel manufacturing and AI data center buildouts, and parallel safe haven inflows.

Bullish forecasts maintained: On February 2, 2026, JPMorgan raised its year-end 2026 gold price target to $6,300 an ounce from $5,055 previously, citing what the bank called a continued diversification trend and raised its forecast for central bank gold purchases in 2026 to about 800 tons. Wells Fargo also raised its year-end 2026 gold target to a range of $6,100. $6,300 per ounce. The World Gold Council believes geopolitical factors are expected to remain front and center in driving gold demand through 2026 and beyond.

For investors, the setup puts mining equities in focus. Producers, royalty companies and explorers with exposure to gold, silver and the broader precious metals have been re-rated through the first half of 2026, and a continued move towards January highs could lead to earnings revisions across the sector. Investors are also keeping an eye on junior names with new exploration news, fresh drill results and rising production guidance.