Dollar Rally Triggers Gold and Silver Price Drop
Gold and silver prices fell sharply in early US trading on Wednesday as a stronger dollar, rising Treasury yields, and renewed expectations of Fed tightening offset the latest decline in oil prices.
The dollar index rose to its strongest level in about two months, with markets pricing in a September rate hike as part of a renewed tightening cycle rather than a one-off adjustment.
Spot gold was trading near $4,308.40 an ounce, down 1.12% on the session, while spot silver was trading near $65.00 an ounce, down 2.88%. The Strait of Hormuz risk premium is being marked lower but not removed, which reduces the immediate inflation impulse that had supported gold earlier in the conflict.
However, the unresolved US-Iran backdrop still leaves a geopolitical bid under bullion and keeps energy-price risk inside the Fed reaction function. Global equity tone was firmer but cautious, with Asian shares aiming for a sixth straight gain on continued AI demand supporting technology stocks.