Gold managed a modest advance on Wednesday, climbing 0.13% to $4,186.15 an ounce, while silver retreated 0.78% to $60.97, slipping back below the $61 threshold it had briefly reclaimed a day earlier. The divergence came as oil prices reversed course, with WTI crude rising 2.13% to $91.28 a barrel and Brent gaining 0.86% to $103.47.
The precious metals complex has been under pressure this week from elevated Treasury yields, which continue to act as a headwind for non-interest-bearing assets. The 30-year U.S. bond yield touched 5.62% earlier this week, its highest level since June 2002, while the 10-year yield hovered near 5.25%. These levels reflect persistent concerns about energy-driven inflation and hawkish comments from Federal Reserve officials, including New York Fed President John Williams, who suggested another rate increase "late this year" could be appropriate.
Wednesday's rebound in oil adds a second source of inflation pressure, working against both metals even as gold managed a small gain. The move follows softer-than-expected U.S. inflation data, with the personal consumption expenditures (PCE) price index rising 0.3% month-on-month in August, bringing the annual increase to 3.4%. That data weighed on the dollar, providing some support for gold.
Despite the daily bounce, both metals remain on track for steep monthly losses. Gold is poised to end September nearly 6% lower, while silver is set to decline almost 8% for the month, as higher energy costs have contributed to broader pressure on prices throughout September.
The week started with a sharp selloff, as gold fell more than 4% on Monday to a seven-week low and silver dropped over 5% the same day. Both recovered Tuesday after weaker-than-expected U.S. job openings and consumer confidence data cooled some Fed rate-hike expectations.
In energy markets, the U.S. moved to shore up domestic fuel supply. The Energy Department announced Tuesday it would offer to loan up to 40 million barrels from the Strategic Petroleum Reserve, the final portion of a 172-million-barrel drawdown ordered in March as part of an International Energy Agency-coordinated response to the Iran war. Bids are due by October 6.
Looking ahead, investors will be monitoring upcoming economic data and Fed speakers for further clues on monetary policy. The interplay between oil prices, Treasury yields, and inflation expectations will likely remain the dominant driver for gold and silver in the near term.
This article is for informational purposes only and does not constitute financial advice.
