Precious Metals Market Recap, August 19, 2026: Gold Sets Multi-Month High as Silver Surges

 

Precious Metals Market Recap, August 19, 2026: Gold Sets Multi-Month High as Silver Surges

(August 19th, 2026) – Precious metal prices surged on Wednesday. Gold and silver prices erased Tuesday’s losses, setting a weekly high for silver and driving gold to its highest price since May. The spot price of gold gained nearly $200 per troy ounce. Silver prices added more than $3.60 per troy ounce. The price action favored silver, driving the gold-silver ratio slightly lower.

The notable domestic economics release Wednesday was the minutes from the FOMC’s July meeting. These minutes reinforced the prevailing market sentiment that the Federal Reserve may move to raise interest rates in the coming months. In July, three voters dissented to argue for a rate hike, although the committee ultimately voted to leave rates unchanged. According to the minutes, “many participants” see a rate hike in the Fed’s near future if inflation fails to slow.

Many participants assessed that policy tightening would likely be necessary if inflation did not decline […] A few of the participants who favored raising the target range for the federal funds rate at this meeting judged that doing so would likely help forestall the need for a steeper and more costly sequence of tightening moves at a later stage.

These meeting minutes again illustrate the difficult spot the FOMC finds itself in. Raising rates could help curb inflation, but doing so is also likely to harm the labor market by raising borrowing costs for businesses. Earlier this month, the July U.S. employment report came in weaker than expected, with the American economy shedding 23,000 jobs. With a weakening job market and a sticky inflation problem, the FOMC will walk a thin line at its September meeting as it attempts to curb inflation without putting stress on a potentially struggling labor market.

Market expectations for a rate hike at the FOMC’s September meeting retreated on Wednesday. CME FedWatch’s projected probability of a rate hike fell to 30.7% on Wednesday, down from 36.1% on Tuesday and 40.6% one week ago. The likelihood of at least one rate hike by the end of 2026 also pulled back, although markets are still pricing in a 64.5% probability that the FOMC votes to raise rates by at least 25 bps before 2027.

For the precious metals market, the landscape remains complex. Safe haven assets like gold and silver tend to thrive when interest rates are coming down, since falling interest rates reduce yields for interest-bearing assets like bonds. Additionally, we often see a surge in metal prices during climates characterized by falling rates because cutting rates can drive inflation.

However, precious metals are contending with more than just domestic economic policy this quarter. The ongoing conflict in Iran has driven oil prices higher, but strong performance in the United States dollar in the wake of the war has kept gold and silver prices relatively subdued. Gold prices slumped for multiple months after setting an all-time high of $5,595 per troy ounce.

U.S. President Donald Trump confirmed on Wednesday that the United States’ naval blockade of the Strait of Hormuz remains in effect, specifying that Washington will impose a “draconian” blockade until Iran accepts its proposals.

Like in previous weeks, traders are focusing on two main things: the conflict with Iran and interest rate speculation. The latter is expected to play a pronounced role in all markets as we get closer to the FOMC’s September meeting, but news out of Iran can have an acute impact on demand for safe haven assets. This is especially true along the Strait of Hormuz; spikes in oil prices have driven gold prices throughout the year.

The big economic report scheduled for next week is the Personal Consumption Expenditures index for July. This report could have major implications for the FOMC as it attempts to balance persistent inflation with weakening signals coming out of the labor market. A retraction in inflation could drive the Fed to hold off on hiking rates, while a hot inflation reading is more likely to boost market expectations for a September hike.

As has been the case for much of the year, traders will also be paying close attention to the Strait of Hormuz and any major news concerning US-Iran negotiations.