Gold and Silver Between Dollar Pressure and Interest Rate Cut Expectations as Markets Continue to Consolidate

Precious metals analysts at Heraeus said that gold and silver may need more time before benefiting from additional support from potential interest rate cuts, while historically high price levels are beginning to influence production priorities for governments and mining companies.

Interest rate outlook and short-term pressure on gold

The report indicated that gold continues trading within a consolidation range after reaching a record high in late December, with the U.S. dollar strength potentially creating short-term pressure.

Analysts noted that the dollar index has moved above the 97 level and may retest the 100-point resistance zone that has held over the past six months, which could act as a headwind for gold in the near term.

Regarding monetary policy, the January minutes of the Federal Reserve suggest that markets expect interest rates to remain unchanged during the next two meetings, with only one rate cut likely in June. By December, expectations tilt toward three or more rate cuts, which could provide significant support for gold in the second half of the year.

Gold also showed strong momentum during North American equity market opening hours, testing the $5,200 per ounce resistance level multiple times around Monday morning. Spot gold was last trading at $5,185.27 per ounce, up 1.51% on the day.

Ghana strengthens its position among top producers

The report highlighted a sharp increase in gold production in Ghana during 2025, reaching approximately 187 tonnes, reinforcing its position as Africa’s largest gold producer and potentially making it the world’s fifth-largest producer, surpassing the United States.

The growth was mainly driven by higher artisanal and small-scale mining output, while large-scale mine production remained stable. The startup of new mines, including the “Ahafo North” project operated by Newmont, helped offset declining ore grades at some existing operations.

However, rising gold prices have prompted the Ghanaian government to consider restructuring royalty payments from a fixed levy to a price-linked range between 5% and 12%, a move that raised concerns among major mining companies. Analysts warned that excessive taxation could discourage long-term investment and eventually reduce future revenues.

Silver benefits from retail demand surge

In the silver market, bar and coin sales surged in January. Sales at the Perth Mint jumped 188% month-on-month to 1.7 million ounces, while gold sales declined 19% to 29 thousand ounces.

The trend reflects price-sensitive retail investors shifting toward silver after it outperformed gold during the recent rally. Despite the monthly surge, silver sales at the Australian mint have generally declined since the 2022 peak.

Spot silver was trading at $86.718 per ounce, up 2.55% on the day after reaching a session high above $88 per ounce.

Hecla increases focus on silver strategy

The report also noted that Hecla Mining is strengthening its “silver-first” strategy by planning to divest its Casa Berardi gold mine.

The strategic shift follows record 2025 results, with revenue reaching $1.423 billion and silver production rising to 17 million ounces (more than 5% year-on-year growth). The company also plans to double exploration and pre-development spending to $55 million in 2026 to extend reserve life and support growth at core silver assets, particularly Greens Creek and Keno Hill.

Analysts believe this move reduces the company’s gold exposure while increasing its sensitivity to silver price volatility, raising both potential risks and returns.