Gold and silver face renewed pressure as rising crude prices lift inflation concerns, strengthen the case for higher-for-longer interest rates and place fresh focus on Jerome Powell’s post-meeting guidance.
Gold and silver are likely to start the coming week under renewed pressure as higher crude prices stir fresh inflation fears and traders wait to see whether the US Federal Reserve keeps its policy language hawkish. According to market commentary, the Fed’s October 27-28 meeting, and more importantly chair Jerome Powell’s remarks after it, could decide whether bullion finds a floor or extends its recent decline.
The metals have already been hurt by elevated bond yields and a stronger dollar, which make non-yielding assets less attractive. Reuters-style market reporting from the week showed gold easing as oil’s advance revived inflation worries, with spot prices slipping on October 20 and then falling further on October 22 to their lowest level in more than two months. Silver also weakened over the same period, reflecting broader caution across precious metals.
That weakness has been visible in Indian futures trading as well. Gold contracts on the Multi Commodity Exchange fell by about 4 per cent over the past week to around Rs 1.42 lakh per 10 grams, while silver dropped more sharply, sliding below Rs 2 lakh per kilogram. Pranav Mer, senior vice-president for commodity and currency research at JM Financial Services, said the move lower reflected a broader corrective phase, as global gold briefly dipped below $4,000 an ounce before recovering.
Mer added that higher energy costs are adding another layer of strain because they can keep inflation sticky and encourage central banks to hold rates higher for longer. Jateen Trivedi, vice-president for research in commodity and currency at LKP Securities, said gold is likely to remain under pressure until investors get a clearer view of the Fed’s policy path. He said a more hawkish message could lift the dollar and push yields higher again, while a softer tone might trigger short covering and offer some relief.
Beyond the Fed, traders will also be watching the European Central Bank and the Bank of Japan, together with a heavy run of US data including durable goods orders, consumer confidence, the Personal Consumption Expenditures price index and third-quarter gross domestic product figures. Eurozone inflation releases, the US mid-term elections, Russia-Ukraine peace discussions and tensions in West Asia are also set to stay in focus, keeping precious metals sensitive to any shift in risk appetite.
Still, the recent slide in gold and silver does not erase the larger forces that have supported the sector this year. Some analysts have argued that central-bank buying and broader fiscal concerns have helped keep demand firm even as Treasury yields rose, suggesting that bullion’s longer-term direction may depend not only on Fed policy but also on whether investors continue to see it as a hedge against macroeconomic instability.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
