Precious Metals Soar on Weaker Dollar and Softening Oil Prices

Silver surged 12% and gold jumped 6% this week, driven by renewed buying interest and a weak dollar index. A softer dollar makes precious metals less expensive for overseas currency holders, thereby boosting demand.

Spot gold gained 6% on the week, trading near the $4,325 per ounce mark, while silver surged 12% over the same period, quoted near the $64 per ounce level.

The increase in precious metal prices comes as oil prices softened due to expectations of the reopening of the Strait of Hormuz. Lower oil prices ease inflationary concerns, making non-interest-yielding assets like gold and silver more attractive to investors.

Despite the weekly gains, markets expect the US Federal Reserve to hike rates at its upcoming meeting. Markets have slightly scaled back on expectations of a rate hike as traders weigh in a 55% probability of a 25 basis point rate hike by the Fed, down from 67% seen last week.