Gold and especially silver have sold off since January. But as we've detailed several times, much of that behavior has been a paper-led, algorithm-exacerbated selloff.
ETFs, futures, and panic-driven positioning have all moved on exaggerated fears, while the structural supply and demand backdrop for these metals hasn't disappeared.
Now, as we enter the end of June and the first half of the year, gold is trading near $4,080 an ounce, down about 27% from its record of $5,595 on January 28. Meanwhile, silver is trading near $60, down from its January record of $121.
On the surface, the price move makes it look like the bull run that lasted for more than a year is over. But when digging deeper, the selling has been concentrated in the paper part of the market. It has not shown up in central banks stepping away, or in industrial demand for silver disappearing.
Gold ETF demand turned net negative by roughly 50 tonnes in the first half of the year, with about $2.7 billion in redemptions, while speculators trimmed their futures positions over the same period. The physical side of this equation did not move the same way, and that distinction matters because paper prices can drop in seconds, while physical supply chains are built over years.
--- QUARTER-END ADDS TO SELLING PRESSURE, AND OPENS DOORS ---
The second quarter closes on June 30, providing a fresh start for repositioning in these paper flows. Large asset managers will then report quarterly performance to investors, following a period in which investors, who were nervous or demanding cash, sold whatever they could quickly.
After a year of gains, marked by a rapid price appreciation in the first month of the year, gold and silver were easy places to sell or take profits. The narrative around the Federal Reserve, which has been driven by rate hikes and inflation, aligned to put extra paper pressure on metals into quarter-end.
The calendar gets more supportive once the quarter turns. Historically, June is the weakest month for gold, which closes higher only about 40% of the time, and July closes higher about 60% of the time for both metals. July is also a delivery month for silver futures on the COMEX, which can force short positions to be closed, rolled, or covered as the new quarter starts, and that buying can push prices up.
Silver is where the paper-to-physical gap is reflected the most. On a normal day, about 23 million shares of Silver Trust Ishares (SLV), the largest silver ETF, change hands. Each share represents exposure to about 0.9 ounces of silver held in the trust. So, a day of trading covers roughly 21 million ounces, even though almost none of that metal actually moves.
Over a year, that comes to more than 5 billion ounces traded on paper, while the world mines only about 820 million ounces. On June 24, during the selloff, about 49 million SLV shares traded in a single session. Almost all of that is investors moving in and out of a paper claim. The silver itself, most of it produced as a byproduct of copper, lead, and zinc mining, takes years to bring to market.
--- THE STRUCTURAL SETUP HASN'T CHANGED ---
Here is what has unfolded while the paper side sold off. Central banks bought an estimated 244 tonnes of gold in the first quarter of 2026, more than the prior quarter and more than the five-year average, led by Poland, Uzbekistan, and Kazakhstan. A record 43% of central banks now say they plan to add even more over the next year.
When we look at silver, the metal saw increased demand forecasts from solar, electronics, and defense, while new mine supply remains flat to negative.
The price action with both gold and silver isn't reflecting this reality properly.
The narrative driving the Fed's rate-hike and inflation story hit gold and silver through what we believe is a temporarily stronger dollar and higher rate expectations, both driven by higher oil prices that have since abated. But, the Fed cannot print ounces, speed up a mine, add refining capacity, or make central banks and industrial users stop needing metals.
This quarter-end selling could begin to fade after June 30. This creates a natural reset point for repositioning into precious metals, through the same paper mechanisms that sold them. Which can in turn, support higher prices into the next quarter.
Our focus remains on long-term positioning, not short-term panic, and following where the physical market creates the next opportunity. Our analysis shows a major opportunity in the gold market that we are targeting for our July Founders+ monthly issue, similar to the copper recommendation that we delivered last month, which is up nearly 50% since our recommendation.
[Founders+ July monthly issue — the specific gold recommendation — is gated; not captured.]