COMEX gold futures were trading at $4,047.70 an ounce, down 0.06%, while COMEX silver futures fell 0.26% to $57.905 an ounce.
The precious metals market remains under pressure after Thursday’s (July 23’s) steep sell-off, when gold dropped about 2% and silver fell more than 3%, as investors reassessed the inflation outlook amid escalating geopolitical tensions in the West Asia.
Normally, geopolitical uncertainty tends to support safe-haven assets such as gold. This time, however, the surge in crude oil prices has shifted market focus toward inflation.
Brent crude briefly crossed the $100-a-barrel mark after fresh attacks in the Red Sea and continued tensions involving Iran disrupted sentiment across global markets. Higher energy prices raise the risk of persistent inflation, reducing expectations of early monetary easing by major central banks.
That has pushed US Treasury yields to multi-month highs while strengthening the US dollar, both of which typically weigh on non-yielding assets such as gold and silver.
Markets rethink Fed rate outlook
Investors are pricing in the possibility that the Federal Reserve may have to maintain a restrictive policy stance if inflation remains elevated.
Higher interest rates increase the opportunity cost of holding bullion, which does not generate any interest income. A stronger dollar also makes gold more expensive for buyers using other currencies, further limiting demand.
Market participants are also awaiting policy decisions from the Federal Reserve, Bank of Japan and Bank of England over the coming days, which could influence the near-term direction of precious metals.
What experts are saying
According to Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions and President of the India Bullion and Jewellers Association, precious metals are facing pressure from multiple macroeconomic factors.
He said rising US Treasury yields, coupled with growing expectations of a Fed rate hike and higher oil prices driven by West Asia tensions, have weakened sentiment for bullion.
From a technical perspective, Kothari said $4,000 an ounce remains a key support level for gold, while $4,200 an ounce is the immediate resistance. For silver, $55 and $63 an ounce are the important levels that could determine the next directional move.
Domestic prices also softened
The weakness in international markets was reflected in the domestic bullion market on Thursday (July 23).
According to the All India Sarafa Association, gold prices in Delhi fell ₹400 to ₹1.49 lakh per 10 grams, while silver declined ₹300 to ₹2.29 lakh per kilogram.
Analysts attributed the decline to profit booking and concerns that elevated crude oil prices could keep global inflation high, prompting central banks to delay or even tighten monetary policy further.
With geopolitical risks, oil prices and central bank expectations dominating sentiment, bullion traders are expected to closely track incoming economic data and policy signals for fresh direction.
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