On the COMEX, gold futures were trading at $4,116.50 per ounce, down $35.40 or 0.85% an ounce. Silver futures also declined 0.83% to $59.795 per ounce, retreating after Wednesday’s (July 22’s) gains.
The pullback follows a strong rally on Wednesday (July 22), when domestic gold prices climbed by ₹1,900 to ₹1.49 lakh per 10 grams, their highest level in two weeks, while silver surged ₹8,500 to ₹2.30 lakh per kg, according to the All India Sarafa Association.
Why are gold and silver prices under pressure today?
The decline comes as traders booked profits after the recent rally, even as safe-haven demand remained supported by escalating tensions in the West Asia.
Oil prices rose to their highest level in more than six weeks after fresh US strikes on Iran and attacks by Yemen’s Houthis on oil tankers in the Red Sea heightened concerns over energy supplies. Higher crude prices have revived worries about inflation, pushing US Treasury yields higher and strengthening the US dollar.
A firmer dollar and higher bond yields generally weigh on gold because the precious metal does not offer any interest income, making it relatively less attractive when borrowing costs remain elevated.
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Market participants are now closely watching the US Federal Reserve’s policy meeting scheduled for next week.
While the Fed is widely expected to leave interest rates unchanged, investors are looking for signals on the future rate path. Persistent inflation concerns, fuelled partly by rising energy prices, have led markets to price in the possibility of another rate hike later this year.
The outlook for monetary policy is expected to remain the key driver for bullion prices in the near term.
What experts say
According to Prithviraj Kothari, Managing Director, RiddiSiddhi Bullions, gold and silver had recovered on technical buying as investors tracked the worsening West Asia conflict and awaited clarity from the Federal Reserve on interest rates.
He noted that rising oil prices and expectations that policymakers may need to keep interest rates higher to contain inflation have kept markets cautious. At the same time, softer US private hiring data has strengthened expectations that the Fed could eventually begin cutting rates, with markets currently assigning better-than-even odds of a September rate cut.
Kothari said the next key resistance levels are around $4,200 and $4,250 per ounce for gold, while silver faces resistance near $63 per ounce.
For now, bullion prices are likely to remain sensitive to geopolitical developments, movements in the US dollar and Treasury yields, and signals from central banks, particularly the Federal Reserve.
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