Precious Metals Market Slump
Gold and Silver Suffer Sharp Losses as Rising Bond Yields Strengthen Dollar
Anonymous
Gold and silver suffered sharp losses as rising government bond yields and a stronger U.S. dollar made the non-yielding metals less attractive. Gold futures fell nearly 4% Monday and silver dropped more than 5%; both remained under pressure Tuesday, with silver trading near $61 an ounce. Oil prices and inflation concerns heightened by tensions around the Strait of Hormuz strengthened expectations that the Federal Reserve would keep rates high or raise them again. The 10-year Treasury yield climbed above 5.2%, while investors awaited further U.S. inflation data for clues about the rate outlook. Silver-mining shares also weakened, including Silvercorp Metals, whose premarket decline was attributed to falling silver prices rather than a company-specific announcement.
Key Points
1
The metals' downturn followed a dramatic rally earlier in the year: gold had reached $5,586.20 an ounce and silver $121.79, while their prices on Tuesday were around $4,166.60 and $60.97, respectively.
2
The Fed had raised its target rate by a quarter percentage point on Sept. 16, to a range of 3.75% to 4%. August CPI rose 0.4% from July and was up 3.4% year over year; gasoline prices increased 3.9% during the month.
3
Iran's foreign minister said Tehran had held indirect talks with the United States through Qatari mediators and was awaiting Washington's response to a proposal to reopen the Strait of Hormuz. President Donald Trump denied offering Iran sanctions relief or access to frozen funds, saying the U.S. had offered Tehran “nothing.”
4
In India's domestic market, MCX December gold was trading near ₹1,48,818 per 10 grams and silver near ₹2,25,321 per kilogram on Tuesday, after opening lower.
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