Gold and Silver Consolidate as Dollar Refuses to Buckle

The precious metals market is experiencing a period of consolidation after a strong breakout earlier this month. Both gold and silver have seen their prices stall, and traders are waiting for the next catalyst to see if the move extends or reverses.

Historic drivers that typically influence the price of gold and silver are sending conflicting signals. The usual relationships between these metals and macro drivers such as US two-year yields, 10-year yields, 10-year real yields, and the US dollar have broken down. This is unusual, as a strong positive relationship between gold and silver remains intact.

The release of the minutes from the July FOMC meeting may provide the catalyst to spark the market out of its temporary funk. The dollar has refused to buckle despite stiffening macro headwinds, with the DXY index holding firm around 99.50. This is notable, given the role the dollar played in the precious-metals breakout earlier this month.