Gold and Silver prices: Gold and silver prices remained under pressure on Friday and were on track to register a fourth consecutive weekly decline as a stronger US dollar and persistent expectations of higher US interest rates continued to erode demand for the precious metals.
Spot gold fell 0.9% to $3,991.49 per ounce by 0247 GMT, while US gold futures for August delivery declined 1% to $4,007.30. Silver also remained under pressure, with spot prices dropping 3.2% to $56.01 per ounce.
The latest decline pushed precious metals below the psychologically important $4,000-an-ounce mark for the first time since November 2025 earlier this week. Gold has now fallen about 29% from its record high of $5,594.82 an ounce touched on January 29 and is set to end the week with losses of around 4%.
Dollar strength, Fed outlook keep precious metals under pressure
A combination of macroeconomic factors has weighed on bullion over the past few sessions, with expectations of tighter US monetary policy emerging as the biggest drag.
Although US Treasury yields eased on Thursday after the Personal Consumption Expenditures (PCE) Price Index—the Federal Reserve’s preferred inflation gauge—rose by a lower-than-expected 0.4% in May, the data did little to alter expectations that interest rates could remain higher for longer.
Bond traders have marginally lowered expectations of another rate hike later this year, while the probability of an increase at the next policy meeting has slipped to about one in three. However, markets are still pricing in three Federal Reserve rate hikes this year, with the CME FedWatch Tool indicating a 64% probability of a September increase.
Meanwhile, the US dollar index remained close to its strongest level since May 2025 and was on course for a second straight weekly gain. A stronger greenback makes dollar-denominated commodities such as gold more expensive for overseas buyers, reducing global demand.
Fresh inflation data also added to investor concerns. Data released on Thursday showed US inflation accelerated further in May, rising above 4% for the first time in three years, in line with economists’ expectations. While gold is traditionally viewed as a hedge against inflation, it tends to lose its appeal during periods of elevated interest rates because, unlike bonds or fixed-income instruments, it does not generate any yield.
Gold and Silver Outlook
Analysts expect gold to remain volatile in the near term as investors continue to assess the trajectory of US interest rates, the strength of the dollar and broader global risk sentiment. While the recent correction has weakened momentum, experts believe the longer-term outlook for precious metals remains constructive despite near-term downside risks.
Colin Shah, Managing Director of Kama Jewelry, believes the recent correction reflects changing macroeconomic conditions rather than a deterioration in the long-term investment case for precious metals.
“The price correction in both gold and silver is the result of a mix of dollar strength and higher expectations of additional hikes in U.S. rates, which have been a drag on investor appetite for non-yielding assets like gold and silver. The near-term trend can still be volatile, particularly silver after the steep drop, but this doesn’t necessarily affect the overall dynamics.”
Shah noted that periods of price weakness typically attract value buying, particularly in physical-demand-driven markets such as India. While acknowledging that prices may remain volatile in the near term, he said the current decline appears to be a healthy correction rather than a structural break, adding that the long-term fundamentals for precious metals remain bullish.
Meanwhile, Renisha Chainani, Head of Research at Augmont, expects both gold and silver to remain under pressure as multiple macroeconomic headwinds continue to weigh on investor sentiment.
“Gold and silver are extending their losing streak even as a temporary US-Iran ceasefire offers little relief, caught between three simultaneous headwinds. A sharp selloff in AI stocks has triggered a broad risk-off wave that is spilling into precious metals. Separately, the Federal Reserve’s increasingly hawkish tone has pushed the probability of a December 2026 rate hike to 86%, lifting the Dollar Index above 101 and pressing down on gold.”
Chainani said the unwinding of yen carry trades, as USDJPY slides to a 40-year low on rising Japanese interest rates, is creating ripple-effect selling across safe-haven assets. According to her, gold has broken below its key $4,000 support and dropped towards $3,950 (around ₹1,40,000). A sustained breakdown could open the path towards $3,600 (around ₹1,30,000), although oversold conditions leave room for a bottom-fishing, short-covering rally towards $4,100 (around ₹1,45,000) and $4,165 (around ₹1,47,000).
She added that silver has also broken below the $60 (around ₹2,20,000) level and slipped to $55.50 (around ₹2,10,000). A continuation of bearish momentum with a breach of the previous day’s low could expose the next support at $50 (around ₹2,00,000), while oversold conditions could trigger a short-covering bounce towards $62 (around ₹2,28,000) and $67 (around ₹2,38,000).
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
