Precious Metals Soar in June: New Cycle?

Platinum is leading the charge for precious metals higher, but is there more to it than geopolitics and a weaker dollar?

What's Driving Multi-Decade Gains

Investors took note as at the fastest rate in nearly 40 years, gaining 27% over the month. Besides being a recognised precious metal, platinum is a scarce industrial metal. However, it is not a rare earth metal, which is a key issue in US-China trade. Although there has been talk of a lack of supply, some analysts argue that a gain this big and fast has more to do with market overenthusiasm. The , which is facing difficulties in reaching a trade deal with the US ahead of the deadline next week. Traders are potentially trying to get ahead of the news.

While the recent surge in platinum has been an outlier, it is still trending in the same direction as other precious metals. in June. However, gold experienced a bit of a rollercoaster, initially gaining amid the Iran-Israel conflict but then falling once the geopolitical tensions eased. Silver, on the other hand, hit a 13-year high this week after posting 24% gains since the start of the year. Part of that can be attributed to general dollar weakness, with the buck losing around 10% against a basket of currencies since the start of the year. However, there could be more to demand than just dollar weakness.

Time for Gold to Shine Through?

Gold rose on Tuesday, resuming its upward trend as the US Government budget for this year advanced through Congress. Platinum and palladium are also gaining as the large spending bill with a $5 trillion increase in the on top of tariff spending. All of this as the Fed gears up to lower rates, which typically make hard currencies more valuable, as well as support gold.

Analysts are wondering if the white metal will catch up, as since the beginning of the year. On the one hand, it is widely used in solar panels, and a surge in growth in China is expected to fuel demand. On the other hand, the after being slapped with new excise taxes in the "big beautiful budget", which could weigh on silver prices. Gold appears to be better positioned to gain as the dollar weakens through the summer.

Gold Pattern Suggests Continuation

The price action in gold reveals a consolidation near the 20-day VWAP at $3350 an ounce. However, the peaks at $3500 and $3450, alongside the troughs at $3120 and $3250, suggest a potential symmetrical triangle. Its completion requires a short-term zigzag to the upside and to the downside, all while remaining within the last swings. However, a pennant is another possible scenario, which implies a premature breakout above the upper 20-day VWAP of $3490. On the one hand, both formations indicate a measured move target near $3750. On the other hand, failing to surpass short-term resistance levels could cause prices to revert below the lower VWAP at $3220, invalidate both continuation patterns, and open the door to lower territories.

Source: SpreadEx | Spot, Gold

Key Takeaways

Precious metals surged in June due to geopolitical tensions and a weaker dollar, with some analysts arguing that platinum's exceptional gains might have been a result of market overenthusiasm. Although palladium and silver did rise, gold experienced a rollercoaster as tensions eventually eased. However, the US government's proposed increase in the debt ceiling and the Fed's anticipated rate cuts could fuel inflation and support the yellow metal.