Gold, Silver Prices Fall as US Interest Rate Hike Fears Ease
Gold and silver prices have taken a breather after a strong run, falling on Tuesday as investors reassessed their expectations around US interest rates. According to Dr Renisha Chainani, Chief Research Officer at Augmont, gold and silver came under pressure as fears of a US interest rate hike next month eased.
Market pricing for a 25-basis-point rate hike in September has shifted towards a nearly 65% probability of the Fed keeping rates unchanged. This change in outlook is influencing gold and silver prices, with investors waiting for clues on the policy path ahead from the minutes of the Federal Reserve's latest meeting.
Oil prices are another factor to watch, as they can add to inflationary pressures and firm up expectations of higher interest rates from the Fed. Elevated energy prices remain a watch point, since they tend to stoke inflation concerns and firm up expectations of higher rates from the Fed.
Geopolitical tensions could provide some support to gold, which is often seen as a safe-haven asset. Gold appears to be regaining its safe-haven footing, with hawkish rhetoric out of Iran helping it shrug off higher yields.