As per the latest available data, COMEX gold was trading at $4,406 per ounce, down 0.33%, while COMEX silver stood at $63.145 per ounce, down 1.39%.
The moves come after both precious metals declined in the previous session. Gold had fallen nearly 2% on Tuesday (August 18), while silver also saw a sharper pullback.
Why are gold and silver falling?
The key factor is the movement in US Treasury yields. Higher yields generally weigh on gold because the metal does not pay interest, making yield-bearing assets relatively more attractive.
US yields have eased from their recent highs, but they remain elevated after a global bond sell-off pushed long-term borrowing costs in major economies towards multi-year highs.
The market is also waiting for the minutes of the US Federal Reserve’s July meeting. Investors will look for clues on the central bank’s interest-rate path, particularly after recent US data showed weaker employment and retail spending along with softer inflation.
Why is silver under more pressure?
Silver has fallen more sharply than gold in the latest trade. Unlike gold, silver has a significant industrial demand component, which means its prices can also react to expectations around global economic activity.
The latest weakness follows a broader pullback in precious metals.
What is happening in the domestic market?
In India, gold prices rose ₹2,000 on Tuesday (August 18) to ₹1.58 lakh per 10 grams for 99.9% purity, according to the All India Sarafa Association.
Silver also gained ₹730 to ₹2.40 lakh per kg.
The domestic prices came in line with decline in global spot prices, with the rupee, import costs and local demand also influencing Indian bullion rates.
Oil prices add to the uncertainty
Crude oil prices have risen amid continuing uncertainty around the US-Iran conflict and the Strait of Hormuz.
Higher oil prices can add to inflationary pressures and make the interest-rate outlook more complicated for central banks. That can weigh on gold if investors expect rates to remain higher for longer.
At the same time, geopolitical tensions can support demand for gold as a safe-haven asset. This leaves bullion markets caught between two competing forces — safe-haven demand on one side and higher yields/rate concerns on the other.
What should investors watch now?
The immediate trigger for gold and silver will be the US Fed meeting minutes. Any indication that policymakers remain concerned about inflation and are unwilling to ease rates could keep pressure on bullion.
On the other hand, softer economic data or a dovish signal from the Fed could support gold and silver by reducing expectations of higher rates.
For now, US Treasury yields, the dollar, crude oil prices, geopolitical developments and Fed signals remain the key factors to watch for the next move in precious metals.
-With Reuters inputs
