Gold and Silver Prices Face Macro Headwinds

Gold prices found some support near $4,150, aided by a modest pullback in the US Dollar, but remained within a two-week trading range and under pressure from broader market forces. Silver prices extended losses, falling toward $60 per ounce as rising oil prices amplified inflation fears. These concerns bolstered expectations for further Federal Reserve tightening, creating significant headwinds for both precious metals.

Hawkish Central Banks and a Strong US Dollar

Central banks globally signaled a continued focus on managing inflation, weighing on non-yielding assets like gold. Minutes from the Reserve Bank of Australia highlighted the case for prompt action to anchor inflation expectations, while a Bank of England official warned against delaying policy action. Despite easing slightly from an 18-month peak, the US Dollar remained broadly strong, limiting gains for dollar-denominated commodities.

Geopolitical Tensions Drive Energy Market Volatility

Heightened geopolitical risks contributed to volatility in energy markets, a key driver for inflation expectations. Oil prices were supported by reports of an attack on a Ukrainian power plant and supply risks in the Middle East following an attack on a Saudi airport. However, prices later eased on news that Russia may increase diesel exports, demonstrating the conflicting pressures impacting the energy sector.

Broader Markets Show Weaker Risk Appetite

Global financial markets displayed signs of risk aversion, with Asian stock markets experiencing a significant sell-off amid concerns over technology sector competition and weakness in US equities. In currency markets, movements were mixed, with the Japanese Yen strengthening while the Euro and British Pound saw modest gains against the US Dollar. The International Monetary Fund (IMF) raised its global growth forecast for 2026 slightly, though a general sense of caution prevailed in the markets.