COMEX gold futures were down 0.28% at $4,339.60 an ounce, while COMEX silver declined 0.58% to $63.765 an ounce. Spot gold eased 0.15% to $4,291.59 an ounce, while spot silver fell 0.31% to $63.03 an ounce.
The moves come after both precious metals recorded a weak start to the week. In the domestic market, gold prices fell ₹500 to ₹1.55 lakh per 10 grams in New Delhi on Monday (September 14), while silver held steady at ₹2.34 lakh per kilogram, inclusive of taxes.
Why are gold and silver under pressure?
The immediate pressure on bullion comes from a combination of higher crude oil prices, a firmer dollar and rising bond yields.
US crude rose 1.27% to $102.68 a barrel, while Brent gained 1.21% to $106.96 after renewed geopolitical tensions in West Asia raised concerns over oil supplies.
Higher oil prices can complicate the inflation outlook. If energy costs remain elevated, central banks may have less room to ease monetary policy, which can weigh on gold and silver because both metals do not generate interest income.
At the same time, the US dollar index rose 0.05% to 99.53. A stronger dollar generally makes dollar-denominated bullion more expensive for buyers using other currencies, potentially reducing demand.
US Treasury yields have also moved higher, with the benchmark 10-year yield touching 5% overnight, its highest level since 2023. Higher bond yields increase the opportunity cost of holding non-yielding assets such as gold.
Why is the Fed decision important?
The Federal Open Market Committee begins its two-day meeting on Tuesday (September 15), with markets closely watching the interest-rate decision and the accompanying commentary.
The rate outlook matters for bullion because interest rates influence both bond yields and the dollar. A more hawkish Fed stance could support the dollar and yields, creating near-term pressure on gold and silver. Conversely, a less hawkish signal could support precious metals by easing pressure from yields and the dollar.
Analysts have also flagged inflation as a key factor. Higher energy prices could keep inflation expectations elevated, potentially influencing the Fed’s policy path.
Can geopolitical tensions support gold?
Geopolitical uncertainty can have the opposite effect on bullion.
Renewed tensions in West Asia, including attacks involving Iran-aligned forces and concerns over oil infrastructure, have kept investors cautious. Such uncertainty can increase demand for gold as a traditional safe-haven asset.
This creates a competing set of forces for gold. Higher oil prices and inflation concerns can push interest rates and bond yields higher, which is negative for bullion. But the same geopolitical tensions can increase demand for gold as a hedge against uncertainty.
What about silver?
Silver faces many of the same macroeconomic drivers as gold, but its price can also respond to industrial demand because the metal is widely used in manufacturing and technology.
That makes silver potentially more sensitive to expectations for global economic growth. A stronger growth outlook can support industrial demand, while concerns over economic activity can weigh on the metal.
On Monday (September 14), global spot silver fell nearly 3% to $62.82 an ounce, while COMEX silver was around $64 an ounce in early Asian trade on Tuesday (September 15).
What should investors watch next?
For bullion markets, the Fed’s policy decision and commentary will be the immediate trigger. Investors will also track crude oil prices, movements in the US dollar and Treasury yields.
Gold and silver could remain volatile as these factors pull prices in different directions. Any easing in crude prices or a less hawkish Fed signal could support bullion, while renewed strength in oil, the dollar or bond yields could keep prices under pressure.
Analysts have also retained a longer-term positive view on gold in some forecasts. ANZ, for instance, has maintained a 12-month gold price target of $5,400 an ounce, citing factors including recovering gold-backed ETF holdings, institutional demand in China and rising investor participation in India. However, the bank also noted that geopolitical uncertainty could simultaneously strengthen gold’s safe-haven appeal.
-With agencies inputs
