- Gold and silver prices fell sharply as US Treasury yields surged on rate hike concerns
- Spot gold dropped 2.03% to $4,358 and silver declined 2.69% to $64.7 per ounce
- Indian MCX gold and silver futures also declined amid global and domestic pressures
Gold and silver continued its losing streak on Tuesday, September 1 as US Treasury bond yields surged amid concerns of a rate hike by the Federal Reserve.
Spot gold dropped 2.03% or $90.2 to $4,358 on Tuesday, contuining its decline after Fed Chair Kevin Warsh vowed to fight inflation. The drop extended this week amid renewed tensions between US and Iran, pushing oil prices higher, raising inflation cpncerns. Silver also fell 2.69% or $1.79 to around $64.7/oz.
Bullion prices fell in India as MCX gold October futures contract declined 1.71% or Rs 2,650 to Rs 1,51,970 per 10 grams, while MCX silver September futures contract dipped 1.84% or Rs 4,291 to Rs 2,29,550 per kg.
The decline in spot gold comes as US Treasury yields surged, raising pressure on precious metals. The benchmark 10-year yield touched its highest level since January 2025 as Middle East tensions raised inflation concerns and drove a global bond selloff. Kevin Warsh's hawkish tone has lifted yields and reduced appeal, while markets now price a 69% probability of a rate hike this month, according to CME FedWatch.
Apart from Fed's rate hike bets, precious metals in India faced pressure after Prime Minister Narendra Modi asked the citizens to refrain from buying gold unless absolutely necessary.
PM Narendra Modi, in a post on Instagram said, "We must embrace the mantra of 'Swadeshi' and 'Vocal for Local.' We should avoid traveling abroad merely for leisure or hosting weddings in foreign lands; instead, we should live by the mantra of 'Weddings in India.' We should also refrain from buying gold unless absolutely necessary.
What to expect from precious metals?
This week, traders will look at ADP report and nonfarm payrolls, where softer employment data is likely to ease rate hike expectations and support metals. According to Kotak, geopolitical risk remains supportive for the bullion,with Trump threatening more strikes against Iran, keeping safe-haven demand alive.
Highlighting outlook for gold and silver, anlayst said, "bearish near term as yields and rate-hike expectations dominate, but downside risks are tempered by geopolitical uncertainty and the potential for weaker labour data to restore demand for gold and silver."
Technical levels to watch
Kotak expects Spot Gold to face support at $4,329.7. If this level is breached, then the metal will find next key support at $ 4,305. A furtherdownside will move the next support $4225.2 level, the analysts highlighted. Resistance is seen at $ 4409.5, followed by $ 4434.2 and $ 4514.
In case of MCX Gold October futures, support levels are placed at Rs 1,51,383, Rs 1,50,651 and Rs 1,48,282. Analysts expect resistance level at Rs 1,53,753, Rs 1,54,485 and Rs 1,56,854.
In terms of silver, Kotak estimates support for Spot Silver at $63.59, followed by $ 62.95 and further downside of $60.89. Resistance is seen at $65.66, $66.3 and $68.36.
On MCX, Silver is likely to face support at Rs 2,27,534, Rs 2,26,021 and Rs 2,21,123. Resistance is placed at Rs 2,32,432, Rs 2,33,945 and Rs 2,38,843.
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