Gold And Silver Prices Drop In Global Trade As Crude Oil Crosses $110 A Barrel; Inflation And Fed Rate Outlook Back In Focus
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Gold and silver fell in global trade on Thursday as crude oil rose above $110 a barrel, renewing concerns about inflation and interest rates. Domestic bullion prices also declined on Wednesday.
Gold and silver fell in global markets on Thursday, 22 October, as a fresh flare-up in West Asia sent crude oil prices higher. The rise in oil has brought inflation concerns back into focus, with investors weighing whether central banks may have to keep interest rates elevated for longer.
COMEX gold futures slipped $20.40, or 0.49%, to $4,129.60 per ounce. The previous close was $4,159. Silver futures saw a steeper fall, losing $0.665, or 1.15%, to trade at $57.045 per ounce against the previous close of $58.095.
Why Are Gold And Silver Prices Falling?
Oil prices moved higher after fresh attacks by Yemen’s Iran-aligned Houthi group in Saudi Arabia. The developments prompted the US to order some diplomats and their family members to leave its missions in Saudi Arabia.
Brent crude futures rose 1.2% to $110.11 a barrel, while US West Texas Intermediate crude gained 1% to $98.12 at 00:34 GMT.
The jump in oil prices has implications beyond the energy market. Costlier crude can push up transport and production expenses, adding to inflation at a time when investors are closely watching the outlook for interest rates.
Gold And Silver Prices In India
Domestic bullion prices moved lower on Wednesday, 21 October, following weakness in international markets. A stronger rupee and elevated crude oil prices also featured in the day's trading.
Gold of 99.9% purity fell ₹1,300 to ₹1.49 lakh per 10 grams, inclusive of all taxes, according to the All India Sarafa Association. Silver dropped ₹1,600 to ₹2.13 lakh per kilogram.
The rupee strengthened by 48 paise to close at 94.43, provisionally, against the US dollar. The gain came with support from Reserve Bank of India intervention to contain dollar demand.
A stronger rupee can reduce the cost of importing gold and silver, as international prices are quoted in dollars. The benefit for local buyers depends on currency movements, international bullion prices, import costs and domestic taxes.
In the international spot market on Wednesday, gold was quoted at $4,127.68 per ounce. Silver fell 0.48% to $57.72 per ounce.
What Could Move Gold And Silver Next?
Crude oil is one factor to watch as tensions in West Asia continue. Another sharp rise in energy prices could add to inflation worries and change expectations around the timing of interest rate cuts.
The US dollar and Treasury yields will also matter. A stronger dollar can weigh on dollar-priced bullion, while higher bond yields tend to make non-interest-bearing metals less appealing.
For now, the Federal Reserve’s policy outlook remains an important part of the picture. If investors expect interest rates to stay high, gold and silver could face further pressure. Expectations of lower rates, on the other hand, may help prices recover.
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
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