Precious Metals Slide on Strong Dollar and Rising Treasury Yields

Gold and silver prices dropped in international markets on Wednesday, October 7, as the US dollar strengthened and Treasury yields climbed. COMEX gold fell 0.31% to $4,174.30 per ounce, while COMEX silver declined 0.47% to $61.30 per ounce. Domestic gold prices had already slipped ₹200 to ₹1.49 lakh per 10 grams on Tuesday, though silver held steady at ₹2.27 lakh per kg.

Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd., attributed the decline to the stronger dollar and higher bond yields, which make non-yielding assets like gold less appealing. A softer-than-expected US jobs report provided some relief by reducing expectations of a Federal Reserve rate hike in October.

Silver broke below its head-and-shoulders neckline, hitting a key target of $60 per ounce, with Kothari eyeing $57 as the next level to watch. For gold, holding above $4,100 per ounce is crucial to avoid a potential drop to $4,000. These levels are technical indicators and may not directly reflect domestic retail prices, which are influenced by factors like exchange rates, taxes, and local demand.

Investors are closely monitoring US dollar movements, Treasury yields, and Federal Reserve policy, along with geopolitical risks in West Asia. Domestic demand remains weak, partly due to subdued retail activity during Pitru Paksha.