Rate Fears Drag Gold and Silver Off Their Highs
The core problem is straightforward: when interest rates stay high, holding gold becomes less attractive. Gold pays no dividend, no coupon. Every dollar sitting in bullion is a dollar not earning 5% in a U.S. Treasury. That tradeoff matters enormously to institutional money, and right now the math is tilting away from metals. Silver faces the same dynamic, with the added complication that industrial demand signals from China remain mixed.
For Turkish investors, the picture is more layered. The lira price of gold has been cushioned by ongoing currency depreciation, meaning local holders haven’t felt the global dip as sharply as dollar-based investors. But that buffer has limits. If the Fed holds rates higher for longer and the dollar strengthens further, even the lira hedge starts to erode. The question isn’t whether gold remains a long-term store of value — it does — but whether the next three to six months favor holding or trimming positions.
💬 Levent KAYIRA Commentary
Ekonomik Gündem Analysis: From my years managing fixed-income and FX portfolios at Garanti and Denizbank, I watched gold behave like a pressure gauge for monetary policy confidence. When rates rise and stay there, gold bleeds — slowly, then all at once. That’s exactly the environment we’re in today.
The Fed funds rate sitting above 5% is the single biggest headwind. In 2020-2021, when real rates were deeply negative, gold at $2,000 made perfect sense. Today real U.S. rates are positive and the opportunity cost of holding metal is real money left on the table.
For Turkish retail investors who piled into gram gold accounts — and there are millions of them — the lira-denominated price still looks supportive because the TL continues to weaken gradually. Gram gold is hovering near record lira levels despite the global pullback. That’s the currency effect doing the heavy lifting, not gold fundamentals.
My read: trim exposure on sharp lira-price rallies, keep a core 10-15% allocation as insurance against tail risks — another currency shock, a geopolitical flare-up. Don’t bet the portfolio on gold here, but don’t abandon it either. The rate cycle will turn eventually.
Kaynak: Google News Ekonomi