---
title: "Julius Baer: inflation, gold and silver outlook in US markets; Fed to hold rates, gold and silver rise"
sdDatePublished: "2026-08-12T14:04:00Z"
source: "https://www.juliusbaer.com/en/insights/market-insights/market-outlook/inflation-gold-and-silver-three-market-themes-investors-cant-ignore-this-week/"
topics:
  - name: "economy"
    identifier: "medtop:20000344"
  - name: "economy, business and finance"
    identifier: "medtop:04000000"
  - name: "financial service"
    identifier: "medtop:20001370"
locations:
  - "United States"
---


Julius Baer: inflation, gold and silver outlook in US markets; Fed to hold rates, gold and silver rise

Inflation, gold, and silver: Three market themes investors can't ignore this week | Julius Baer

Cooling US labour market conditions are helping to ease inflation pressures, reducing the likelihood of further Federal Reserve interest rate hikes.

A weaker US dollar, combined with improving market momentum and renewed ETF inflows, is creating a supportive backdrop for gold and silver.

The recovery in precious metals may have further room to run, with both gold and silver continuing to offer potential opportunities for investors.

The US job market is cooling, and that's easing inflation pressures

The US job market is slowing down but not weakening dramatically. That's good news for the Federal Reserve because it reduces inflation pressures without pushing the economy into a recession.

Average monthly job gains in 2026 have now fallen to 61,000, approaching the estimated range for breakeven job growth that keeps the unemployment rate stable. Lower job creation has been driven by fewer government jobs and lower-paying service sector jobs, while cyclical job dynamics have held up thanks to more jobs in construction and some manufacturing job additions.

And with fewer signs of labour market overheating, the risk of wage-driven inflation is fading. At the same time, economic growth remains resilient, suggesting the US economy is achieving a rare balancing act: slowing enough to ease inflation pressures without stalling.

For investors, the message is clear. As labour-market inflation risks recede, the case for additional interest rate hikes continues to weaken, giving the Fed more room to keep its policy rate unchanged in the months ahead.

Why gold and silver are shining again

Improving momentum, renewed investor demand, and a softer US dollar are strengthening the case for gold and silver.

This view is supported by a combination of positive market trends and growing investor interest. Historically, both metals have performed particularly well when prices are rising and investors are adding exposure through exchange-traded funds (ETFs), a sign of growing confidence in the asset class.

Gold has traditionally delivered annualised returns of 19% when trading above its 50-day moving average and attracting ETF inflows, compared with just 4% per annum when ETF flows were negative. The contrast is even more pronounced for silver, which generated annualised gains of 24% when in an up-trend and supported by ETF inflows, versus an annualised decline of 29% when in an uptrend but experiencing ETF out-flows.

At the same time, a weakening US dollar is providing an additional tailwind. Because gold and silver are typically priced in US dollars, dollar weakness can support demand and prices for both metals, although other market factors also play an important role.

With momentum building and investor demand returning, the recent rally in precious metals may still have room to run. We remain constructive on both gold and silver and continue to see opportunities for investors to benefit from further gains.

What investors need to know

Cooling US labour market conditions are easing inflation pressures and supporting the Fed’s path towards its 2% target. Slower job growth, softer wage gains, and stable unemployment dynamics point to a healthy but non-overheating economy. With inflation risks from labour markets receding, expectations for further rate hikes have faded, strengthening the case for the Fed to keep rates unchanged.

Meanwhile, both gold and silver should benefit from a weakening US dollar, which we have downgraded back to bearish. In our view, the recovery in both gold and silver still has further room to run.