1 week ago
Gold and silver face pressure as US yields reach highs
Gold and silver prices came under pressure after a sharp fall at the start of the week.
Gold was mostly steady on Tuesday, but silver continued to fall.
Higher US interest rates can make assets that pay interest more attractive than gold.
The US 10-year real yield reached its highest level in 18 years, near 2.85%.
Markets are also expecting the Federal Reserve to raise rates again.
A stronger dollar, higher oil prices and selling by some investors added pressure.
However, gold funds still received more money than they lost overall last week.
This means some investors still want gold as protection against financial stress.
Gold futures traded flat near $4,168 per ounce on Tuesday after falling more than 3% Monday.
Silver futures declined over 1% internationally to about $61 per ounce after a drop exceeding 5% Monday.
US 10-year real yields reached an 18-year high near 2.85%, increasing the opportunity cost of holding gold.
Higher crude prices, a stronger dollar, technical selling and profit-taking were cited as pressures on precious metals.
Global gold ETFs recorded $134.2 million in net inflows last week, despite rising real yields.
- Who
- Gold and silver traders, Federal Reserve policymakers, ETF investors and market analysts, including Saxo Bank’s Ole Hansen.
- What
- Gold stabilized while silver declined as higher US yields and expectations of additional Federal Reserve rate increases pressured precious metals.
- Where
- International markets and India’s Multi Commodity Exchange.
- When
- Tuesday, following sharp gold and silver declines on Monday; ETF flow data covered the previous week.
- Why
- Higher Treasury yields, a stronger dollar, rising crude prices, technical selling, profit-taking and anticipated interest-rate increases reduced support for precious metals.
Short-Term Price Pressure
Longer-Term Gold Support
Impact of higher yields
Short-Term Price Pressure
Rising real yields increase the opportunity cost of holding non-yielding gold and could continue weighing on prices.
Longer-Term Gold Support
Financial and fiscal strains caused by higher borrowing costs could strengthen gold’s longer-term investment case.
Liquidity and ETF demand
Short-Term Price Pressure
Margin calls, refinancing stress and broader liquidity needs could force investors to sell gold to raise cash.
Longer-Term Gold Support
Gold’s liquidity may attract investors during financial stress, while recent net inflows into gold ETFs suggest continued demand.
Key facts
- COMEX gold
- Flat at approximately $4,168 per ounce on Tuesday.
- COMEX silver
- Down more than 1% at approximately $61 per ounce.
- India gold futures
- December futures were flat at Rs 148,600 per 10 grams.
- India silver futures
- December futures fell 0.9% to Rs 225,500 per kilogram.
- US 10-year real yield
- Near 2.85%, described as an 18-year high.
- Expected Federal Reserve action
- Short-term interest-rate markets were pricing three additional 25-basis-point hikes by next April.
- Gold ETF flows
- Net inflows totaled $134.2 million last week, with $1.73 billion in inflows and $1.59 billion in outflows.
Quotes
Ole Hansen
Head of commodity strategy at Saxo Bank
“US 10-year real yields have climbed to an 18-year high near 2.85%, while short-term interest-rate markets are now pricing another three 25-basis-point Fed hikes by next April. Traditionally, such a sharp increase in the opportunity cost of holding a non-yielding asset would be a major headwind for gold.”
financialexpress.com
“This creates an important short-term paradox: the financial and fiscal strains created by higher yields may strengthen gold’s longer-term investment case, while an acute liquidity squeeze could initially trigger selling and weigh on prices.”
financialexpress.com
Sources
Related news
Gold and Silver Slide as Dollar and Yields Rise
Gold And Silver Prices Slip As US Yields, Tensions Weigh
Gold and silver plunge as Iran talks falter, yields rise
Gold Faces Pressure as Yields Rise and Fed Bets Shift
Gold, Silver Prices Stay Flat Ahead of Fed Decision
Gold Falls ₹1,600 as Dollar and Oil Surge
Jharkhand Launches Digital Marketplace for Rural Women Products
Russian Billionaire Loses $9 Billion After Criticizing Ukraine War
Dolphins' Kohou Out, Secondary Faces 2025 Challenges
