Precious Metals Pressured by Hawkish Fed Outlook

Gold and silver prices experienced significant declines, with gold sliding to over one-week lows and silver plunging as markets reacted to a more aggressive Federal Reserve outlook. The downward pressure was driven by a stronger US Dollar and rising Treasury yields, which increased the opportunity cost of holding non-yielding bullion.

US Dollar Surges on Strong Data and Fed Repricing

The US Dollar Index extended its rally, gaining broadly against major currencies like the Euro, British Pound, and Japanese Yen. This strength was underpinned by resilient US economic data, including a solid expansion in industrial production, which fueled a hawkish repricing of Fed expectations, with some strategists now projecting no interest rate cuts in 2026.

Mixed Performance in Industrial Metals Amid Supply Concerns

While precious metals fell, base metals saw divergent performance driven by specific supply and demand fundamentals. Copper rallied to record levels, supported by tariff risks and strong structural demand, while both aluminium and platinum markets showed signs of tightening due to supply gaps and repeated deficits.

Rising Energy Prices Fuel Inflationary Concerns

Elevated oil prices, supported by persistent geopolitical supply risks and potential supply-chain disruptions, contributed to inflation worries across global markets. Concerns over higher fuel costs fed into the narrative that central banks, particularly the Federal Reserve, may need to keep monetary policy tighter for longer to control inflation.