Precious Metals Decline on Hawkish Fed Outlook

Gold and silver prices fell during Asian trading as hawkish commentary from Federal Reserve Chairman Kevin Warsh bolstered expectations for future interest rate hikes. This sentiment strengthened the US Dollar, which traded near a two-week high, putting downward pressure on non-yielding assets like gold and silver.

Mixed Economic Signals from China

Economic data from China indicated a complex recovery path, with the official Manufacturing Purchasing Managers' Index (PMI) for August improving but remaining in contractionary territory. At the same time, the Non-Manufacturing PMI suggested ongoing weakness in the services sector, painting a picture of an uneven economic rebound. The People’s Bank of China (PBOC) also set a weaker daily reference rate for the yuan against the dollar.

Geopolitical Tensions Support Oil Prices

Geopolitical risk was a key factor in broader markets, with reports of Iran firing missiles following US strikes helping to keep crude oil prices elevated. West Texas Intermediate (WTI) remained firm, providing support for commodity-linked currencies like the Canadian Dollar. The combination of high oil prices and rising bond yields contributed to a cautious tone in Asian equity markets.