Precious Metals Fall on Fed Hike Expectations

Gold and silver prices declined as strong US economic data solidified expectations for another Federal Reserve interest rate hike. Gold dropped over 1% to trade near $4,000, while silver fell around 3% to a new year-to-date low as the outlook for tighter monetary policy kept buyers on the sidelines.

Eldorado Gold Lowers Production Outlook

On the supply side, Eldorado Gold reduced its 2026 gold production forecast by 18% and increased its capital spending estimates. The miner attributed the revised outlook to setbacks and delays at its Skouries copper-gold project located in Greece.

Bank of Canada Hikes Rates

The Bank of Canada proceeded with a 25 basis point interest rate hike, taking its policy rate to 2.5% despite soft growth indicators. This hawkish policy move provided support for the Canadian Dollar, which firmed against the US Dollar and other commodity currencies.

Other Global Central Banks Hold Steady

In contrast to the move in Canada, other major central banks maintained their current policy stances. The European Central Bank and the Bank of Thailand both kept their key interest rates on hold, while market participants anticipated the Bank of Japan would do the same. These decisions occurred amid ongoing currency fluctuations in Asia, with a firm US Dollar influencing regional currencies like the Indonesian Rupiah.