Commodity markets tightened as oil, the dollar and long‑term yields pulled non‑interest bearing assets lower. COMEX gold ended at $4,253.40 per ounce, down 1.57% from the previous close, while silver finished at $63.01, a 2.76% drop.
The slide follows a week‑long decline for both metals, with December‑delivery futures falling $103.70 and $2.35 respectively, marking 2.34% and 3.5% falls from last week’s close.
US Treasury yields have surged to levels not seen since 2004, with the 30‑year benchmark approaching 4.5%. The 30‑year surge adds pressure on bullion, which is priced in dollars and is sensitive to yield curves.
The dollar index climbed to 101.39, its highest in two months, dampening demand for dollar‑denominated commodities. A sustained rise above 101 could deepen the current pullback.
Oil prices add an inflationary dimension; Brent rose 1.6% to $106 a barrel and U.S. crude to $93.47. Higher crude fuels inflation worries that could support further Fed rate hikes.
On the domestic front, MCX gold futures for October settled around ₹1.5 lakh per 10 grams, declining nearly 2.3%, while silver futures slipped 3% to ₹2.34 lakh per kg. A weaker rupee could offset some of the international dip.
Traders now focus on the U.S. economic calendar. Consumer confidence, GDP, PCE inflation, manufacturing data and the September non‑farm payrolls are due this week, with Fed officials’ comments under scrutiny.
If the labor market remains strong, expectations of a tighter policy could further erode bullion demand. Conversely, a softer report could lift safe‑haven sentiment.
With yields, the dollar, oil and geopolitical uncertainty all in play, volatility is likely to stay elevated. Market participants should monitor the upcoming payroll data and any shifts in the Fed’s stance for next week’s directional cues.