Central Banks Are Buying Gold, So Why Are Silver Buyers Vanishing?
The gold and silver market has entered one of its most revealing periods of 2026.
War risk has returned to the Persian Gulf. Oil prices have surged. Inflation fears have reappeared. Yet gold and silver initially moved lower instead of attracting a powerful safe-haven bid.
Meanwhile, central banks continue to accumulate gold. Retail buyers, however, have stepped away from silver bars and coins at one of the world’s largest bullion mints.
That contrast tells investors something important. Gold and silver may share the precious metals label, but buyers do not treat them the same way.
Why Gulf Conflict Sent Gold Lower
Gold normally attracts buyers during geopolitical crises. However, the latest escalation between Iran and the United States produced a different chain reaction.
The United States and Iran signed an interim memorandum on June 17. The agreement called for a ceasefire, negotiations, sanctions relief, and greater freedom of navigation through the Strait of Hormuz. Washington then waived several Iran sanctions for 60 days as talks began.
That fragile opening did not last.
Renewed attacks on commercial vessels triggered fresh U.S. strikes against Iranian military and maritime targets. Iran then launched attacks against sites in Bahrain, Kuwait, and Qatar. By July 13, Washington had announced plans to restore its blockade of Iranian ports.
At first glance, that escalation should have lifted gold. Instead, oil delivered the strongest response.
Higher crude prices raised fears that energy costs could reignite inflation. In turn, traders increased their expectations for tighter monetary policy. The dollar strengthened, and bond yields rose. Those developments created immediate pressure on non-yielding gold and silver.
Therefore, the market did not reject gold’s safe-haven role. Rather, traders focused first on the interest-rate consequences of higher oil.
Gold Breaks Below $4,000 as Oil Rewrites the Trade
On Monday, July 13, spot gold fell 3% to $3,996.76 per ounce. U.S. gold futures settled 2.6% lower at $4,005.70. Silver also fell sharply and traded near $58 per ounce.
Oil moved in the opposite direction. Brent crude reached $83.30, while West Texas Intermediate rose to $78.14. Investors feared that continued trouble around the Strait of Hormuz could disrupt one of the world’s most important energy routes.
However, the market reversed again on Tuesday. Comex gold gained 1.6% and settled at $4,061.10. Silver rose nearly 2% to $58.772. Softer U.S. inflation data weakened the dollar and eased some pressure on metals.
That two-day swing illustrates the problem facing bullion traders. Geopolitical risk supports gold. Yet inflation risk can support higher interest rates. Those two forces now pull the metal in opposite directions.
Consequently, the $4,000 level has become more than a round number. It has become a test of whether long-term buyers will absorb short-term selling.
Central Banks Keep Buying Gold
While traders debate the next Federal Reserve move, central banks continue to build their gold reserves.
Official institutions bought a net 41 metric tonnes in May. That marked a clear increase from earlier in the year. Poland led all reported buyers with 18 tonnes. China followed with 10 tonnes. Uzbekistan added nine tonnes, while Kazakhstan bought seven tonnes.
Russia and Turkey sold a combined nine tonnes during the month. Therefore, gross purchases exceeded the 41-tonne net figure.
The National Bank of Poland held 614 tonnes after its May purchase. That total moved Poland closer to its stated 700-tonne goal. It also placed the country alongside the world’s largest sovereign gold holders.
Poland’s buying carries a broader message. Central banks do not trade gold like hedge funds. They do not need a quick gain after every purchase. Instead, they use gold to diversify currency exposure, strengthen reserve security, and hold an asset without another government’s credit risk.
That strategy matters even more during sanctions, wars, and financial disputes.
However, investors should note the timeline. Poland, China, Uzbekistan, and Kazakhstan made their reported May purchases before the latest July escalation. Therefore, the buying does not represent an immediate reaction to the latest Gulf strikes.
Instead, it confirms a longer trend.
The World Gold Council’s 2026 survey found that 89% of participating central banks expect official gold reserves to grow during the next 12 months. Moreover, a record 45% expect their own institutions to increase their holdings.
China Accelerates Its Gold Strategy
China strengthened that trend in June.
The People’s Bank of China added about 15 tonnes during the month. That marked its largest monthly purchase since October 2023. It also extended China’s buying streak to 20 consecutive months.
The June addition lifted China’s officially reported holdings to about 2,346 tonnes. Gold represented roughly 9% of the value of the country’s total reserves.
China’s percentage remains modest when compared with several Western central banks. However, its absolute holdings rank among the world’s largest.
More importantly, China increased its purchases during a major price correction. That move suggests price sensitivity, but it does not suggest a change in strategy. Beijing appears willing to buy more aggressively when falling prices create an opportunity.
For private investors, that creates a powerful source of underlying demand. Central banks can slow their purchases. They can also pause. Yet their multi-year accumulation gives the gold market a buyer that operates beyond daily headlines.
Perth Mint Silver Sales Collapse
The physical silver market tells a very different story.
The Perth Mint sold 293,732 ounces of silver bars and coins in June. Sales fell 19% from May and 37% from June 2025. Meanwhile, gold bar and coin sales rose 53% from May to 29,730 ounces.
The contrast could hardly look sharper.
In January, the Perth Mint sold more than 1.72 million ounces of silver. In February, sales climbed above 1.92 million ounces. By June, monthly volume had fallen below 300,000 ounces.
Heraeus analysts calculated that silver fell about 22% during June, from roughly $75 to $58.50 per ounce. Normally, a falling silver price attracts bargain hunters. This time, many buyers stayed away.
Several factors may explain that hesitation.
First, silver had already experienced an extraordinary run. The metal reached record levels earlier in 2026. Therefore, some investors may still view prices near $60 as expensive, even after the correction.
Second, silver carries greater industrial exposure than gold. Concerns about interest rates, manufacturing, technology spending, and global growth can weaken its investment appeal.
Finally, volatility can frighten retail buyers. A sudden drop may look attractive. However, a continuing decline often encourages buyers to wait for an even lower price.
Does Weak Perth Mint Demand Prove Silver Has Lost Its Buyers?
No.
The Perth Mint serves customers around the world. Its results offer a useful measure of retail bullion activity. Still, one mint cannot represent the entire physical silver market.
The reported figures cover minted products. They do not capture every private dealer, exchange-traded product, wholesale bar transaction, industrial user, or government mint.
Therefore, investors should not confuse weak Perth Mint sales with the disappearance of global silver demand.
However, the numbers still matter. They show that one important segment of the retail market has pulled back dramatically. They also suggest that lower prices alone may not bring buyers back immediately.
Premiums will provide another clue. If coin and bar demand remains weak, dealer premiums may narrow. Conversely, a sudden return of retail buying could tighten inventories and push premiums higher even before spot silver recovers.
Sierra Gorda Adds a New Supply Story
While retail demand struggles, miners continue to prepare for the next production cycle.
South32 and KGHM have approved a major expansion at the Sierra Gorda copper and molybdenum mine in Chile. KGHM owns 55% of the joint venture, while South32 owns 45%.
The project will add a fourth grinding line. It will also expand crushing and flotation capacity. As a result, Sierra Gorda expects annual processing capacity to rise from about 48 million tonnes to 60 million tonnes.
South32 expects initial production from the expansion during its 2030 financial year. Full production should follow in 2031. Once the project reaches full capacity, Sierra Gorda expects average annual payable output of about 1.7 million ounces of silver. The mine should also produce more copper, molybdenum, and gold.
That additional silver will not arrive soon enough to influence today’s market. Nevertheless, it shows how higher long-term metal prices encourage producers to expand existing mines.
KGHM already ranks among the world’s largest silver producers. The group produced 1,347 tonnes in 2025, equal to roughly 43.3 million troy ounces.
What Bullion Investors Should Watch Next
Gold must first prove that buyers will defend the $4,000 region. Central-bank accumulation may help. However, the dollar, oil prices, bond yields, and Federal Reserve expectations will still control short-term trading.
Silver faces a harder test.
The metal needs renewed retail demand. It also needs confidence in global industrial growth. Without both, silver could remain more volatile than gold.
Still, weak coin and bar sales can change quickly. Retail investors often return after prices stabilize rather than while prices continue falling.
For now, the bullion market has divided into two camps. Central banks continue to treat gold as strategic money. Meanwhile, many private buyers treat silver as a trade that can wait.
That split may define the next major move in precious metals.
