On COMEX, gold futures were down 0.98% at $4,353.10 an ounce, after touching an intraday low of $4,350.10 an ounce. Silver futures fell 1.80% to $64.19 an ounce and hit a low of $64.15 an ounce.
The weakness in precious metals comes amid a broader risk-off move in global markets. Asian stocks fell sharply in early trade after renewed US strikes on Iran pushed oil prices higher. Brent crude rose 0.7% to $95.34 a barrel.
Higher oil prices have revived concerns about inflation, which could make it harder for the US Federal Reserve to ease monetary policy. US 10-year Treasury yields were around 4.80%, while the dollar index remained near a two-week high of 99.67.
Why are gold and silver falling?
Gold typically comes under pressure when bond yields and the US dollar rise. Unlike interest-bearing assets, gold does not generate regular income, making it relatively less attractive when yields increase.
Markets are also reassessing the Fed’s interest-rate outlook. According to CME FedWatch data cited in the market report, traders were pricing in a 67% probability of a 25-basis-point rate hike at the Fed’s September 16 meeting, up from 39.6% a week earlier.
The renewed escalation between the US and Iran has added another layer of uncertainty. While geopolitical tensions can traditionally support safe-haven demand for gold, the current move in bullion shows that higher oil prices, inflation worries, yields and the dollar are dominating investor sentiment.
Gold, silver extend recent losses
The latest decline follows a sharp sell-off in the previous session. In New Delhi, gold of 99.9% purity fell ₹2,700 on Tuesday (September 1) to ₹1.58 lakh per 10 grams, according to local traders.
This marked the fifth consecutive session of decline.
Gold has now fallen ₹8,900, or about 5.3%, from ₹1.67 lakh per 10 grams on August 25.
Silver also declined ₹5,000 on Tuesday (September 1) to ₹2.40 lakh per kg.
In global markets, spot gold fell about 2% on Tuesday (September 1) to $4,368.58 an ounce, while silver declined nearly 3% to around $64.68 an ounce.
What should investors watch next?
The immediate direction of gold and silver will depend on the interplay between US interest-rate expectations, Treasury yields, the dollar and oil prices.
US economic data will therefore be important. Markets are watching manufacturing and services activity data this week, followed by the August non-farm payrolls report on Friday (Septeber 4). Stronger-than-expected economic data could reinforce expectations of higher-for-longer interest rates and keep pressure on bullion.
For Indian investors, the rupee-dollar movement will also matter. A weaker rupee can cushion the impact of falling international gold prices on domestic prices, while a stronger rupee can amplify the decline.
-With agencies inputs
