On COMEX, gold was trading at $4,467.70 an ounce, down $6, or 0.13%, from the previous close of $4,473.40 an ounce. The metal moved between a high of $4,493.10 an ounce and a low of $4,466 an ounce.
Silver was at $66.07 an ounce, down 0.161, or 0.24%, from the previous close of $65.895 an ounce. It touched an intraday high of $66.685 an ounce and a low of $65.760 an ounce.
In the spot market, gold was up 0.2% at $4,424.28 an ounce, while US gold futures for December delivery rose 0.2% to $4,480.90 an ounce. Spot silver gained 0.9% to $66.40 an ounce.
Why are gold and silver prices rising?
The biggest driver is the changing outlook for US interest rates.
Recent US economic data has reduced expectations of a rate hike in September. Unexpected job losses in July, softer consumer price inflation and weaker retail sales have led markets to reassess the likelihood of tighter monetary policy.
This matters for gold and silver because both are non-yielding assets. When interest rates are high, investors can earn relatively attractive returns from interest-bearing assets such as bonds. If rate-hike expectations ease, the opportunity cost of holding precious metals falls.
That can make bullion more attractive.
Weaker dollar also supports bullion
The US dollar has remained near multi-month lows against several major currencies.
A weaker dollar generally supports gold because the metal is priced in dollars. It makes bullion relatively cheaper for investors holding other currencies, potentially supporting demand.
The same dollar effect can support silver prices.
Why is the Fed important for gold and silver?
The Federal Reserve’s policy outlook has become a key market trigger.
A Reuters poll conducted between August 12 and 17 found that a strong majority of economists expect the Fed to keep its key interest rate unchanged through the end of 2026.
Markets are now waiting for the minutes of the Fed’s latest meeting, due on Wednesday (August 19). The minutes could offer more clues about how policymakers view inflation, employment and the need for further rate increases.
If the Fed signals a less aggressive approach, gold and silver could get further support. A hawkish message, on the other hand, could lift the dollar and bond yields and weigh on precious metals.
Silver has another driver
Silver does not move only on interest-rate expectations.
The metal also has significant industrial demand, including from electronics and solar-related applications. This gives silver an additional price driver compared with gold.
For now, however, monetary policy, the dollar and broader investor sentiment remain important factors for both metals.
What should investors watch?
The Fed meeting minutes are the immediate trigger. Beyond that, markets will track US inflation and employment data for clues on the September policy decision.
Gold is currently facing resistance around the $4,450-$4,460 an ounce zone, while silver has been holding above the $63 an ounce level, according to market commentary.
For Indian investors, global prices are only one part of the equation. Domestic gold and silver rates also depend on the rupee-dollar exchange rate, import costs, taxes and local market conditions.
So, even if international bullion prices rise, Indian prices may not move by the same percentage.
For now, the combination of easing Fed rate-hike expectations, a softer dollar and continued geopolitical uncertainty is keeping precious metals supported.
-With Reuters inputs
