Gold and silver likely to see huge gains as debasement trade opens: Report
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Gold and silver could see a strong rally as fiscal dominance and changing real yields reshape the macro outlook, according to a Saturday report.
Key Takeaways
- Vallum Capital says gold and silver could rally strongly as fiscal dominance and shifting real yields reshape the macro outlook.
- The report calls the recent pullback a repricing, not a reversal of the case for accumulating precious metals.
- A 2% real-yield threshold and a turning Dollar Index are cited as structural signals of a lasting shift, not a chart pattern.
- Central banks bought 288.9 tonnes of gold in Q2 2026, a 411% quarter-over-quarter jump, even as Western ETF outflows and jewelry demand fell.
Vallum Capital’s report said the recent pullback merely repriced holdings rather than undermining the case for accumulating precious metals. It added that a 2 % real‑yield threshold and a turning Dollar Index are structural signposts pointing to a lasting reversal, not just a fleeting chart pattern.
“The US Fed is effectively trapped: raising rates lifts the cost of servicing $9.2 trillion of rollovers, while keeping rates steady leaves real rates negative at the short end with CPI above target,” the firm noted.
The report argued that either scenario debases the currency, which is the “setup gold has correctly priced in every previous cycle.”
Central banks purchased 288.9 tonnes of gold in Q2 2026, a 411 % quarter‑over‑quarter jump, even as Western ETF outflows totaled 44.8 tonnes and jewelry demand slipped 17 %.
The analysis highlighted that silver has vastly outperformed gold in every cycle where gold posted a sustained rise.
In the current 2021‑2026 cycle, silver has gained 263 % versus gold’s 164 %, a 99‑point outperformance, with the ratio still at about 69 : 1 compared with the long‑run median of 45 : 1 to 50 : 1.
Following Kevin Warch’s nomination as Federal Reserve Chairman, gold fell 25–30 per cent, wiping nearly Rs 23,000–28,000 crore from that year’s new inflows in mark-to-market terms. Gold later recovered from roughly $4,196 to ~$4,359, reaffirming ETFs and gold funds as the fastest-growing retail access route into the metal even through volatility.
