Gold and silver prices dipped on Wednesday, October 28, as investors weighed the impact of US interest rate expectations, a stronger dollar, and rising inflation risks amid escalating tensions in West Asia. On COMEX, gold was trading at $4,068.70 per ounce, down $5.90 or 0.14%, while silver stood at $54.410 per ounce, down $0.103 or 0.19%. The decline followed a similar drop in domestic bullion prices on Tuesday, October 27.
The weakness in precious metals was attributed to the strengthening US dollar, which makes dollar-priced bullion more expensive for international buyers. Additionally, expectations of elevated US interest rates pressured gold and silver, as these assets do not offer interest income. Investors are closely watching the Federal Reserve's October 28 policy decision for any hints on future monetary easing or rate hikes, which could further influence bullion prices.
Rising oil prices added to inflation concerns, with Brent crude futures gaining 1.3% to $115.36 per barrel and US West Texas Intermediate crude rising 1.22% to $101.12. While higher oil prices could push up inflation and strengthen expectations of higher interest rates, they could also boost safe-haven demand for gold amid escalating geopolitical tensions. Silver, meanwhile, faced additional pressure due to concerns about industrial demand, with Gaurav Garg of Lemonn noting stronger selling pressure below $54 per ounce.
Looking ahead, Prithviraj Kothari of RiddiSiddhi Bullions Ltd. suggested that gold could decline towards $3,950 per ounce and silver towards $50 per ounce, but also indicated a potential 10-15% rebound. Investors are advised to monitor the Federal Reserve's policy guidance, dollar movements, crude oil prices, and geopolitical developments, along with the outlook for industrial demand in the case of silver.