Key Points
- Central banks bought 474 tonnes of gold in Q1 2026, the second-highest quarterly total on record, signaling sustained institutional demand.
- Nearly 90% of central banks plan to add to gold reserves in the next 12 months, driven partly by concerns over counterparty risk following Russia's frozen dollar assets.
- Silver's structural supply deficit and industrial demand from solar panels, electric vehicles, and electronics give it a distinct price catalyst heading into the second half of 2026.
- Special Report: The $15 Gold Fund That Pays Up to $1,152/Month
After climbing to an all-time high of over $5,300 per troy ounce in January 2026, the spot price of gold dropped to around $4,100 on July 1, punctuated by a 10% drop in June. That was its fourth straight monthly decline. A similar story has played out in silver.
To say that’s shaken out many weak hands would be an understatement. However, that may be shortsighted. While predicting market tops or bottoms is a fool’s errand, there are a couple of catalysts to suggest gold prices may be ready to reverse course and bounce higher.
The most important data point to consider is central bank buying. These are institutions with the longest time horizon, and in the first quarter of 2026, they bought 474 tonnes of gold, the second-highest quarterly amount on record.
Why Gold Is Regaining Its Role as Sound Money
The European Central Bank’s annual report on global reserve assets revealed that, as a percentage, at the end of 2025, central banks owned more gold than U.S. Treasuries or the Euro. In the interest of accuracy, that’s due in large part to the surge in gold’s price. At 2023 prices, U.S. Treasuries would still outweigh gold.
But here’s what many investors overlook. Unlike many retail investors, nearly 90% of central banks say they plan to keep adding to their gold reserves in the next 12 months. If gold were trading at over $4,000 an ounce and no country wanted it, central banks would sell. That’s not happening. In fact, central bank gold buying has been above historical norms since 2022.
And the key reason for that came from the U.S. government’s decision to freeze Russia’s dollar reserves after it invaded Ukraine in 2022. This raised the question of counterparty risk for countries that may end up on the wrong side of a U.S. foreign policy decision. Since gold can’t be sanctioned or seized, its appeal becomes obvious.
Governments that could have rebalanced back into Treasuries are choosing not to. That choice reveals a preference. Which is why investors may want to rethink the outlook for gold in the second half of 2026.
Industrial Demand Could Fuel Silver Prices in H2 2026
Silver plays a different role than gold, and that's part of its appeal. Roughly half of annual silver demand now comes from industrial uses, including solar panels, electric vehicles, and electronics. That gives silver a growth driver gold doesn't have.
The Silver Institute has projected a structural supply deficit for several consecutive years, as mine production struggles to keep pace with demand. When investment demand returns to a market already running a deficit, price moves can happen quickly.
Investors also watch the gold-silver ratio, which measures how many ounces of silver it takes to buy one ounce of gold. That ratio has been running well above its long-term historical average, a sign some analysts point to as evidence that silver is undervalued relative to gold.
The Easiest Way to Invest in Gold: SPDR Gold Shares ETF
For investors who are only interested in capturing the price action in gold, the SPDR Gold Shares ETF (NYSEARCA: GLD) tracks the price of physical gold.
Investors will have to pay fees with an expense ratio of around 0.40%, and there are counterparty risks to consider.
But they avoid the custody and insurance costs of owning physical metal.
Newmont Stock Offers Value If Gold Prices Rebound
Another way to invest in higher gold and silver prices is through mining stocks. Junior miners may carry the most asymmetric risk/reward for aggressive traders. But long-term investors may want to look at Newmont Corp. (NYSE: NEM) , which is one of the largest miners with a strong track record of performance.
Mining stocks, like NEM, are down this year in sympathy with the decline in gold. However, the drop in Newmont stock is only around 3% through the first half of 2026. And at around 12x earnings, NEM shares trade at a discount to their historic value as well as the S&P 500.
Adding to its appeal, as of July 1, the stock is trading about 44% below its consensus price target of $139.35.
Wheaton Precious Metals Offers Lower-Risk Exposure to Gold
Wheaton Precious Metals (NYSE: WPM) is a different way to invest in a rebound in gold and silver prices.
The company finances miners in exchange for the right to buy gold and silver at fixed, below-market prices for the life of the mine.
The success of that business model showed up in the company’s Q1 2026 numbers, which included record revenue of $901.5 million and earnings of $582 million.
As of July 1, WPM traded about 35% below its consensus price target of $154.73.
First Majestic Silver Is a High-Conviction Silver Stock for H2 2026
For investors who want direct exposure to silver prices without gold as a hedge, First Majestic Silver Corp. (NYSE: AG) is worth a look.
The company operates primarily in Mexico and generates the majority of its revenue from silver production, making it more sensitive to swings in the metal's price than diversified miners.
That sensitivity cuts both ways. First Majestic tends to outperform larger, diversified miners when silver rallies, but it can also underperform during pullbacks like the one seen in June.
For investors who believe the setup described above favors higher silver prices into year-end, that volatility may be the point rather than a drawback.
Why Gold and Silver Still Belong in a Diversified Portfolio
Most gold and silver investors aren’t speculators. They are looking for assets that can’t be printed, diluted, or controlled. Yes, gold and silver don’t produce a yield, the price is volatile, storage is expensive, and supply can’t expand quickly to meet demand. But in a world where many investors are looking to return to sound money, those are reasons to trust gold and silver, not dismiss them.
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