The Gold Rush Is Stalling—But the Fed’s About to Unleash a Bullion Explosion

After two years of central banks gobbling up gold like it was going out of style, demand is finally cooling off… for now. But don’t let the dip fool you. The real action is just getting started – and it’s coming straight out of Washington. With the Fed eyeing a rate cut this September, gold’s next move could be explosive.

I’ve been around long enough to know that when central banks pull back and Wall Street gets jittery, that’s the moment retail investors like you and me should lean in. And silver? Well, that metal’s waking up, too – but in a different way.

Let’s break it down.

Central Bank Gold Demand Slows – But That’s Not the Whole Story

According to the folks at Heraeus, global central banks bought 166.5 tonnes of gold in Q2 of 2025 – the lowest haul since mid-2022. That’s a 21% drop from last year’s record-breaking spree.

But here’s the catch: even with the slowdown, they still bought over 400 tonnes in just six months. That’s not bearish. That’s just less bullish. The People’s Bank of China is still stacking gold, adding another 60,000 ounces in July alone – their ninth straight month of buying.

So what’s going on? Geopolitics. Inflation. Sanctions. A global game of monetary chess.

Even though the Trump-Putin summit in Alaska didn’t end in a handshake, it did put the brakes on more U.S. sanctions. That’s a win for Russia – and a warning shot for the dollar. When countries like China and Russia know what's coming, they hedge with gold. That hasn’t changed. It’s just that they’re pacing themselves.

All Eyes on the Fed – The Cut That Could Launch Gold

The big shift isn’t coming from Beijing or Moscow. It’s coming from the Fed.

Inflation in July held at 2.7%, with core inflation at 3.1%. That’s still way above the Fed’s so-called “target.” But guess what? The political pressure is mounting. Treasury Secretary is already whispering about a 50 basis point cut – and futures markets have a 96% chance of at least a 25 bp cut coming in September.

Let me translate: the Fed’s about to pour gasoline on a smoldering gold market.

Why? Because when rates drop, the dollar weakens – and gold, priced in dollars, pops higher. Even without cuts, gold’s been on a tear this year. Imagine what happens with cuts.

But the real problem? Credibility. If the Fed cuts now, they’ll look like they’re caving to political pressure. But if they don’t, they risk breaking the economy’s back. It’s a lose-lose – unless you’re holding gold.

Spot Gold and Silver Update – Short-Term Dips, Long-Term Opportunity

Gold slipped a hair at the start of this week, now sitting at $3,336.21/oz, barely down 0.02%. That’s noise. Ignore it.

More interesting is silver – and what’s going on behind the scenes.

Silver: ETFs Climb, Coins Slide – What It Really Means

At first glance, the silver market looks split. Coin sales are down big. The Perth Mint moved just 452,000 ounces in July, down from 5.5 million ounces in the same period last year. The U.S. Mint isn’t doing much better – only 305,000 ouncesof Silver Eagles sold in July.

That might look bearish. But it’s not.

Instead, we’re seeing a major shift to paper silver – specifically ETFs. Silver ETF holdings are now up 10% year-to-date, sitting at 791 million ounces, with 20 million ounces added just in the last month.

That’s institutional money waking up.

And there’s still plenty of headroom. Remember, back in 2021, ETFs were holding over 1 billion ounces. We’re still well below that – but trending up.

Spot silver hit a morning high of $38.27/oz before pulling back slightly to $38.08, still up 0.20% on the day.

The Takeaway: Get Ahead of the Fed

Here’s what you need to know:

• Central bank demand for gold has slowed – but remains historically strong.
• The Fed is boxed in. Rate cuts are coming. When they do, the dollar’s going to take a hit.
• Gold will likely surge. Silver could move even faster.
• Coin sales are cooling, but ETF demand is picking up – a sign that smart money is returning to silver.

Bottom line? Don’t wait for the next Fed meeting to protect your wealth. These markets move fast, and once the cut happens, the train could leave the station.

If you’re still sitting on cash or relying on the banking system to keep you safe… I’ve got news for you – you’re playing with fire.

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