May’s metal market was as volatile as U.S.-Iran peace talks, and there was a new sheriff in town. Kevin Warsh was sworn in as the 17th Federal Reserve chair on May 22, pledging to “lead a reform-oriented Federal Reserve” at a moment when surging oil prices are pushing inflation higher, and consumer sentiment has fallen to a record low.
On the same day, Fed Governor Christopher Waller said the Fed should “make it clear that a rate cut is no more likely in the future than a rate increase,” which in turn prompted a large market response, with traders anticipating a rate hike as soon as October.
The metals market bore the brunt of volatility, as a combination of Fed updates, stalled peace talks, and persistent volatility brought another month of pressure, especially for palladium.
Gold
Gold opened May at $4,614.34, reached a monthly high of $4,735.71 on May 11, and closed at $4,538.28, a 1.6% decline. The month’s defining session came on May 14, when a hotter-than-expected April PPI reading of 6.0% year over year hit markets the same morning Warsh’s confirmation was finalized, sending the 10-year Treasury yield to 4.47% and strengthening the dollar. Reuters reported that Warsh inherits an economy in which oil prices above $100 a barrel, high import tariffs, and AI-driven utility costs are pushing inflation higher simultaneously, leaving little room to pivot toward rate cuts.
Two analysts framed the month’s gold dynamic from different angles:
Johan Palmberg, World Gold Council: ”There is a tug-of-war between short-term pressure and longer-term structural support.”
Dan Coatsworth, AJ Bell, via MoneyWeek: ”Gold is often considered to be a haven in troubled times, but what many people don’t realize is that its price can still drop in a falling market. Investors often sell what they can in the face of trouble, and gold is a liquid asset.”
However, beneath the noise, central bank buying resumed in April, with Poland adding 14 tonnes and China adding 8 tonnes, its 18th consecutive month of buying, according to the World Gold Council. JPMorgan holds its year-end 2026 gold spot price target at $6,300, and no major bank tracked by Yahoo Finance has moved off its bullish long-term outlook despite three straight months of declines.
Silver
Silver opened at $75.35, hit a monthly high of $87.51 on May 13, and closed at $75.28, essentially flat for the month, which masked a volatile four weeks that saw the metal swing sharply on every geopolitical development before settling back near where it started.
The silver story in May shifted toward a supply-demand reassessment that analysts say will define the metal’s ceiling for the rest of the year. HSBC raised its full-year silver price target to $75 per ounce for 2026 but maintained a cautious medium-term view. According to James Steel, chief precious metals analyst at HSBC, “moderating deficits, in our view, will not be sufficient to propel silver sharply higher for prolonged periods,” as the global silver market deficit is projected to shrink to 73 million ounces in 2026 from 143 million ounces in 2025.
UBS cut its silver forecasts sharply, projecting the 2026 deficit to narrow to just 60-70 million ounces from a prior estimate of 300 million ounces, driven by weaker photovoltaic demand at elevated prices, lower jewelry consumption, and higher mine supply. The bank now expects silver spot prices to trade broadly sideways in its base case, though it noted that gold prices trending higher would provide an important floor.
Platinum and Palladium
Platinum opened at $1,990.75, reached $2,140.90 on May 13, and closed at $1,920.90, a decline of 3.5% for the month. Johnson Matthey’s latest PGM Market Report, covered by Mining Weekly, projects a platinum market deficit of 371,000 ounces for 2026, supported by firm industrial demand in the petrochemicals and electronics sectors and constrained mine supply from South Africa and Russia, where Norilsk Nickel’s output is expected to fall to its lowest level in 20 years.
Palladium had the worst month of the four metals, falling 11.1% from $1,529.00 to $1,358.70, with a monthly high of $1,537.25 on May 6, followed by a steady decline as the broader macro pivot toward higher-for-longer rates hit industrial metals hardest. The U.S. Department of Commerce issued a final countervailing duty determination of 109.1% on Russian palladium imports in May, following April’s anti-dumping ruling of 132.83%, which Reuters reported could lock in prohibitive tariffs if the International Trade Commission confirms that U.S. industry has suffered harm. Johnson Matthey projects palladium moving into a supply surplus of 214,000 ounces in 2026, which limits the upside even as trade policy adds near-term volatility.
Looking Ahead
The market sentiment heading into June is the same one that has defined every month since March: oil prices, Fed signals, and developments in the Iran war will drive short-term price action, while the structural case for buying gold and silver continues to build underneath. The June 16-17 Federal Reserve meeting will be Kevin Warsh’s first as chair, and markets will be watching whether April’s hot CPI and PPI data push the board toward a rate hike signal, which would add another layer of downward pressure on gold in the short term.
Palmberg’s framing from the World Gold Council remains the right one for investors watching daily prices: the tug-of-war between short-term pressure and longer-term structural support hasn’t been resolved yet, and it won’t be resolved by any single Fed statement or ceasefire announcement. The precious metals spot price data tells the monthly story. The structural data tells the longer one.
Spot price data sourced from CMI Gold & Silver’s daily spot prices.
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