Gold, Silver Could See Major Gains As Fiscal Dominance Reshapes Markets

Gold and silver Market , 22 Aug : Gold and silver could see substantial gains as fiscal dominance and changing real yields reshape the broader macroeconomic outlook, according to a Vallum Capital report released on Saturday.

The report said the recent correction only repriced ownership and did not undermine the case for accumulating precious metals. It identified a 2 per cent real-yield threshold and a reversing Dollar Index as structural indicators of a lasting shift rather than a temporary chart pattern.

“The US Fed is structurally boxed in: hiking raises the cost of servicing $9.2 trillion in rollovers, and holding leaves real rates negative at the front end with CPI above target,” the firm said.

The report argued that either course could weaken the currency. It described this as the ‘setup gold has priced correctly through every prior cycle’.

Central banks purchased 288.9 tonnes of gold during the second quarter of 2026. That marked a 411 per cent quarter-on-quarter increase.

Western ETF outflows reached 44.8 tonnes, while jewellery demand declined 17 per cent.

Vallum Capital said silver has historically outpaced gold during sustained gold rallies.

Between 2021 and 2026, silver gained 263 per cent against gold’s 164 per cent, creating a 99-point advantage.

The ratio remains at 69-fold, compared with its long-term median of 45-fold to 50-fold.

After Kevin Warch’s nomination as Federal Reserve Chairman, gold dropped 25-30 per cent.

The fall erased nearly Rs 23,000–28,000 crore from that year’s new inflows on a mark-to-market basis.

Gold later recovered from around $4,196 to about $4,359, supporting ETFs and gold funds as rapidly expanding retail routes into the metal despite volatility.