Gold, Silver Poised for Strong Gains as Fed Actions Debilitate Currency
New research from Vallum Capital suggests that gold and silver are poised to make significant gains due to fiscal dominance and shifting real yields. The report notes that a recent correction in prices merely re-priced ownership, rather than invalidating the investment thesis for accumulating precious metals.
The US Federal Reserve is 'structurally boxed in', according to Vallum Capital, as hiking interest rates increases the cost of servicing $9.2 trillion in rollovers and holding rates negative at the front end with CPI above target. This situation leads to debasing the currency, which gold has correctly priced through every prior cycle.
The report highlights that central banks purchased 288.9 tonnes of gold in the second quarter of 2026, a 411% surge from the previous quarter, while Western ETF outflows reached 44.8 tonnes and jewellery demand fell 17%. Additionally, silver has outperformed gold by a significant margin in every cycle where gold made a sustained advance.