U.S. Political and Regulatory Developments
- The U.S. Supreme Court ruled 5:4 against the Trump administration's appeal to overturn the Lisa Cook ruling, confirming that Federal Reserve Governors can only be removed "for cause" and protecting Fed independence (p. 11).
- The Supreme Court overturned the 90-year-old "Humphrey's Executor" precedent in the Slaughter vs. Trump case, granting the president unrestricted power to fire heads of other independent agencies (such as the FTC and SEC) without cause (p. 11).
- Under new Chair Kevin Warsh, the Federal Reserve is shifting toward a data-driven approach that prioritizes market reaction to economic data over forward guidance, though critics warn this could increase market volatility and uncertainty (p. 14).
Precious Metals Market Dynamics
- Gold prices faced downward pressure, suffering a "Death Cross" and slipping below $4,000 per ounce, influenced by a high Core PCE of 4.4% and robust Q1 GDP of 2.1% (p. 1, p. 10).
- The silver-to-gold ratio has shown a very tight correlation with the U.S. two-year bond yield, averaging 0.90 since Middle East hostilities began and recently reaching 0.98 (p. 10).
- Exchange Traded Products (ETPs) remained defensive, with gold holdings dropping 123t from their late-February high, and silver experiencing a massive net swing drop of 11,070t from 2025 levels (p. 30).
- LBMA vault holdings showed gold rising by 20t in May (up 286t YTD), while silver rose 158t in April but fell 206t YTD (p. 33).
Central Bank Gold Reserves and China's Discrepancy
- The World Gold Council's annual survey of central banks revealed that 78% of respondents expect gold's proportion of global foreign exchange reserves to increase over the next five years (p. 12).
  - Interest rates, geopolitical instability, and inflation are the top three drivers of central bank reserve strategies (p. 12).
  - Vaulting locations remain diversified, with 57% of banks favoring the Bank of England, while the Swiss National Bank's share dropped from 12% to 6% (p. 12).
- An analysis of China's gold market from 2015 to 2025 revealed a cumulative supply surplus of 3,862t over demand; if this entire surplus is held in the PBoC's reserves, gold would represent 19.5% of its total reserves at current prices (p. 13).
Global Economic Outlook and Supply-Demand Balances
- The U.S. is expected to impose wide-ranging tariffs on July 24, 2026, targeting countries like China, the EU, Japan, and India over forced labor concerns, which is driving early shipping and high freight rates (p. 10).
- Bloomberg economic surveys showed a raised U.S. GDP forecast for 2027 to 2.1%, a reduced probability of recession in China alongside lower GDP growth expectations, and expectations of a June rate hike in Western Europe (pp. 15-17).
- Supply-demand forecasts for 2026 project a gold surplus of 1,647t (p. 35) and a silver surplus of 2,532t when accounting for investment and ETPs (p. 36).
- Longer-term forecasts for 2027 project a physical surplus of 352,000 ounces for platinum (p. 37) and 637,000 ounces for palladium (p. 38).

Precious Metals Front Desk Presentation, 1 July 2026

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