by Craig Hemke, Sprott Money:
What a crazy year this has been, and it’s nearly half over. Let’s take stock today of what we expected, where we’ve been, and where we might be headed in the second half.
Let’s begin with how we finished 2025. Last year brought massive gains for gold, and the percentage move was far in excess of the average this century. In the chart below from In Gold We Trust, note that prior “big” years for gold saw 25% gains, but the year 2025 was more than double that!
TRUTH LIVES on at https://sgtreport.tv/
Gold Performance in Major Currencies, 2000-20025 YTD
Review that chart and you had to wonder if the gold price would be able to post another gain in 2026. However, as the year began, it sure looked like it would. Gold stormed out of the gate and added nearly 20% in just the first four weeks of the year.
But then it all changed.
Federal Reserve Policy And Gold Market Trends
First came the announcement in late January that U.S. President Trump was expected to appoint Kevin Warsh to replace Jerome Powell. Warsh was immediately expected to be more “hawkish” than Powell, and after last week’s June FOMC meeting, it appears he will be.
But gold and silver prices were able to shake off that news in February and soon recovered most of the late January losses. In fact, the big gold mining share ETF “GDX” actually closed with an all-time high on Friday, February 27, and everything looked great…until it didn’t.
Geopolitical Risks Impacting Gold Prices
What happened next was something that neither I nor any other analyst had baked into their 2026 forecasts: a major war between the U.S. and Iran, with a subsequent closure of the Strait of Hormuz. These events sent interest rates and the U.S. dollar index soaring as fears of severe price inflation rippled through global markets. These same concerns flipped Federal Reserve rate expectations from cuts to hikes, which you can see in the latest Summary of Economic Projections issued at last week’s FOMC meeting.
