Federal Reserve Hawkishness Weighs on Gold and Silver Prices

The price of gold and silver continues to fall, reaching seven-week lows. Gold has dropped around 3% while silver is down by approximately 4.7%. This decline can be attributed to rising oil prices and fading hopes for a Middle East ceasefire.

According to Fiona Cincotta, StoneX Senior Market Analyst, the path to recovery for gold and silver lies with the Federal Reserve. The Fed needs to close the door on further rate hikes for U.S. Treasury yields and the U.S. dollar to ease, allowing gold and silver prices to recover.

Markets are currently pricing a 70% chance of another Federal Reserve rate hike in October, which is keeping U.S. Treasury yields high and the U.S. dollar strong. This makes it more expensive for investors to hold non-yielding assets like gold.