Gold and silver slide: Why traders expect more volatility ahead
COMEX Gold was trading at $4,078.80 per ounce, down $17.50 or 0.43%, after touching an intraday high of $4,102.90 and a low of $4,062.60. COMEX Silver declined $0.909, or 1.53%, to $58.315 per ounce.
The decline in bullion prices came as Asian equity markets traded mixed following signs of renewed diplomatic engagement between Iran and the United States after days of escalating conflict in the Strait of Hormuz. Investors, however, remained cautious as concerns persisted over the durability of the interim peace agreement.
Market participants shifted focus toward risk assets, while a stronger US dollar continued to weigh on precious metals. The dollar index hovered near a one-year high, making gold and silver more expensive for holders of other currencies.
Analysts said expectations of tighter monetary policy from the US Federal Reserve also limited buying interest in bullion. Rising odds of another US rate hike this year have supported Treasury yields and boosted the dollar, reducing the appeal of non-yielding assets such as gold and silver.
Oil prices, meanwhile, moved higher
amid lingering geopolitical uncertainty. Brent crude futures rose 0.85% to $72.6 per barrel, while US West Texas Intermediate crude gained more than 1% to trade near $70 per barrel. Elevated energy prices kept inflation concerns alive, although crude has retreated sharply from recent highs as markets reassessed supply risks.
Broader financial markets remained volatile as investors monitored concerns over stretched valuations in artificial intelligence-related stocks and awaited key economic data from major economies.
Commodity analysts said bullion prices are likely to remain sensitive to developments in the West Asia, movement in crude oil prices and upcoming macroeconomic indicators, including US nonfarm payrolls, unemployment figures and manufacturing data.
In India, gold and silver futures also witnessed heavy losses during the previous week. On the Multi Commodity Exchange (MCX), gold futures for August delivery fell ₹3,041, or 2.06%, to settle at ₹1.44 lakh per 10 grams, while silver futures for September delivery plunged ₹15,269, or 6.4%, to ₹2.23 lakh per kilogram.
Market experts said persistent dollar strength, easing inflation fears and subdued industrial demand continued to pressure precious metals, especially silver. However, bargain buying, central bank purchases and geopolitical uncertainty could provide intermittent support to gold prices in the near term.
Traders are now awaiting fresh economic cues and comments from Federal Reserve officials for clearer direction in global bullion markets.
-With Reuters inputs
