For most of 2026, gold, silver and Bitcoin have been a painful place to put money.
The reason is not hard to find: a fast-shifting outlook for Federal Reserve policy.
The year opened with hopes for rate cuts. Then the war in Iran sent energy prices surging, revived inflation, and flipped the market’s bet from lower rates to higher ones.
For gold, silver and Bitcoin, assets that pay no yield and rise or fall on the path of interest rates, that shift was brutal.
From their January peaks, the SPDR Gold Shares (NYSE:GLD) has fallen about 26%, the iShares Bitcoin Trust(NASDAQ:IBIT) roughly 37%, and the iShares Silver Trust(NYSE:SLV) close to 50%.
Now, almost in unison, all three are rebounding again, for the very same reason they lost it, only in reverse.
An Oil-Driven Disinflation
The Cleveland Fed’s inflation nowcast now shows negative month-over-month readings for both June and July, with headline consumer prices running at minus 0.06% and minus 0.22%, respectively.
WTI crude has slumped to around $68 a barrel, back to where it traded at the end of February before the war began.
That collapse has a clear source.
Since the United States and Iran agreed in mid-June to halt fighting and reopen the Strait of Hormuz, the chokepoint that had been largely closed since February, Gulf supply has flooded back.
Saudi Aramco just cut the official price of its flagship Arab Light grade to Asia for August by $11 a barrel, swinging it from a $9.50 premium to a $1.50 discount over the regional benchmark, as reported by Bloomberg on Monday.
It was the biggest reduction in at least 26 years and far deeper than the $8 cut analysts had expected.
The Hike Narrative May Lose Its Fuel
On the surface, the hawkish case is still standing.
The U.S. economy is expanding at around 2%, with recent core inflation prints in the 3%-4% annualized range, which, on its own, argues for tighter policy.
“The question for hikes seems to be one of when, not if,” said Enrique Díaz-Alvarez, chief economist at Ebury.
Underneath, the data has moved the other way.
The U.S. economy added just 57,000 nonfarm payrolls in June, well short of the roughly 110,000 economists expected, with prior months revised lower.
Traders moved quickly. Odds of a September rate hike, tracked via CME FedWatch, slid from around 66% to near 53%, and the policy-sensitive 2-year Treasury yield eased toward 4.13%.
At the European Central Bank’s Sintra forum, Fed Chair Kevin Warsh said inflation expectations “have come down in recent weeks,” reinforcing the softer tone.
The New York Fed’s May survey put one-year inflation expectations at 3.5%, versus 3.1% three years out, a gap that Ed Yardeni reads as a sign that households see today’s price pressure as temporary rather than structural.
Futures markets had been pricing a rising chance of hikes into year-end, with a nearly one-in-five probability of a target range as high as 4.00% to 4.25% by December.
That pricing is now eroding.
Why Gold, Silver And Bitcoin Are The Unwind Trade
22V Research’s strategist Jordi Visser laid out the mechanics.
“If the Fed-hike positioning unwinds, it’s good for gold, silver, and Bitcoin,” Visser said.
The logic runs through positioning. When the market prices in high rates, the opportunity cost of holding a non-yielding asset rises, and Treasurys look more appealing.
When those rate-hike odds unwind, the calculation reverses just as fast. A dovish repricing hands back exactly what a hawkish one took away.
Gold and Bitcoin are now moving almost in lockstep, their 60-day correlation at 0.92, a sign the two are trading as a single macro expression of the same rate view.
What’s Next?
The relief rally in Bitcoin, gold and silver rests on one assumption: that the disinflation is real and durable. It may not be.
The drop is almost entirely energy. Core inflation, which strips out food and fuel, remains firm, with the Fed’s preferred core PCE gauge last at 3.4%, and average hourly earnings still running around 3.5% year-over-year.
That keeps Warsh’s inflation-first Fed in a policy box. The decisive data point is the June CPI report due July 14.
For now, the takeaway is simple: the trade that punished gold, silver and Bitcoin all year has begun to reverse, and its staying power hinges on upcoming data.
