According to Craig Hemke, an analyst at Sprott Money, gold and silver prices may have hit their bottom in 2026, as inflation pressures ease and expectations regarding the Federal Reserve's interest rate hikes diminish. The past four months have been disappointing for precious metal investors, particularly following the onset of the Iran conflict, which heightened expectations for interest rate increases.

Hemke noted that the beginning of 2026 is marked by expectations that the Federal Reserve will continue to lower interest rates. "Inflation continues to cool compared to the peak levels of 2022, and the market anticipates that the Fed will begin to cut rates by mid-year, with the possibility of two rate cuts before the year ends," he stated. This outlook shifted dramatically with the outbreak of the Iran conflict, which led to a surge in energy prices.

Despite the challenges, Hemke believes that the downturn in the precious metals market may be nearing its end. He pointed out that the market had reached a "hawkish peak" shortly after the Federal Open Market Committee's June meeting. He emphasized that the notion of multiple rate hikes by the Fed is unrealistic. While a symbolic rate increase could occur later this year, he suggests that the Fed's policy will likely revert to a direction aimed at reducing rates to lower borrowing costs and create negative real interest rates.

"If my assessment is correct, the lows in gold and silver prices observed at the end of June are likely to be the lows for all of 2026," Hemke remarked. However, he cautioned against expecting a rapid recovery in gold and silver prices. Technical signals have been significantly damaged, with prices remaining within a downward structure and below all key moving averages.

He advised investors to monitor the 20-day moving average for signs of the next trend in precious metals. "If and when gold and silver prices return above this initial trend indicator, investors may increasingly believe that the year's lows are behind us. In summary, with the conclusion of the Iran conflict and declining energy prices, the latter half of 2026 is likely to witness lower-than-expected CPI and PCE inflation. This will signal that the 'hawkish peak' has passed, allowing gold and silver investors to refocus on the fundamental factors that drove prices up in 2024 and 2025," he concluded.

Note: The opinions expressed in this article are the analyst's views and are for informational purposes only, not investment advice. The gold and silver markets can be highly volatile, and investors should exercise caution when making decisions.