On COMEX, gold was down 0.41% at $4,420.80 per ounce, while silver slipped 0.21% to $66.86 an ounce. Gold traded between $4,384.10 and $4,421 an ounce, while silver touched a high of $66.895 an ounce.
The moves come as crude oil prices climbed for a fourth consecutive session. Brent crude rose 1.6% to $99.49 a barrel, while West Texas Intermediate gained 1.72% to $94.63.
Why oil prices matter for gold and silver
The latest rise in oil prices follows renewed military tensions between the US and Iran. The escalation has raised concerns about disruptions to energy supplies and pushed crude closer to the $100-a-barrel mark.
For precious metals, the impact is more complicated.
Geopolitical tensions can support demand for gold as investors seek safe-haven assets. However, a sustained increase in oil prices can also raise inflation concerns. That could affect expectations about how quickly the US Federal Reserve can lower interest rates.
Higher-for-longer interest rates can weigh on gold and silver because both metals do not generate interest income.
Dollar and Fed outlook remain key
The US dollar remains another important driver. A weaker dollar generally makes dollar-denominated commodities more attractive to buyers using other currencies.
Investors are also looking to upcoming US inflation data for clues about the Fed’s next policy moves. Any indication that inflation remains sticky could temper expectations of aggressive rate cuts, potentially limiting gains in precious metals.
At the same time, signs of softer inflation could strengthen expectations of lower rates and provide support to gold and silver.
Gold and silver can respond differently
Although both are precious metals, their price drivers are not identical.
Gold has a stronger investment and safe-haven role. Central-bank buying, real interest rates, the dollar and geopolitical risk can therefore have a significant influence on its price.
Silver, on the other hand, also has substantial industrial demand. It is used in electronics, solar equipment and several other industrial applications. This means expectations for economic and manufacturing activity can influence silver alongside the factors that affect gold.
That difference can result in periods when silver outperforms gold, or vice versa, even when both are responding to the same broader market environment.
What happened in the Indian market
The domestic market also showed a divergence on Tuesday (September 8).
Gold prices fell ₹2,150 to ₹1.58 lakh per 10 grams for 99.9% purity, extending their decline for a second session, according to the All India Sarafa Association.
Silver, however, rose ₹600 to ₹2.41 lakh per kg after remaining unchanged in the previous two sessions.
Gaurav Garg, Head of Research at Lemonn, said silver was recovering on support from a weaker dollar, while investors remained focused on US inflation data and Federal Reserve rate expectations.
In the immediate term, precious metals are likely to remain sensitive to oil prices, developments in the US-Iran conflict, the dollar and incoming US inflation data. The interaction between these factors will determine whether safe-haven demand can offset pressure from changing interest-rate expectations.
-With agencies inputs
