In his mid-year commodity report, McGlone highlights that gold reached its highest valuation relative to Treasuries in nearly four decades during the first quarter. While the precious metal secured significant gains in 2025, the market dynamic has shifted. If equity market momentum cools, investors are likely to favor bonds, which offer higher yields and a clearer path for reversion compared to the historically high prices seen recently in the gold market.

Federal Reserve policy remains the primary catalyst for this trend. Despite holding rates steady in June, the central bank’s focus on price stability and signals for further tightening create a difficult environment for gold. Historically, the metal has struggled during periods of rising real yields, posting negative returns in most years dominated by such tightening. McGlone warns that even silver, despite its current 18% undervaluation and strong industrial demand, is unlikely to escape the downward gravitational pull of gold as economic constraints continue to weigh on the broader precious metals sector.