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Gold and Silver Post Sharp Weekly Losses as Strong US Jobs Data Boosts Dollar
Precious metals witnessed significant declines during the week as stronger-than-expected US employment data reinforced expectations of prolonged tight monetary policy by the Federal Reserve. A stronger US dollar and rising bond yields further weighed on gold and silver prices across global and domestic markets.
Gold and silver prices recorded substantial losses during the week as investors reacted to robust economic data from the United States, which strengthened expectations that the Federal Reserve may maintain a restrictive monetary policy stance for a longer period.
The stronger-than-anticipated US employment figures boosted confidence in the resilience of the American economy, reducing expectations of near-term interest rate cuts. Higher interest rates generally diminish the appeal of non-yielding assets such as gold and silver, prompting investors to shift toward interest-bearing instruments.
The rally in the US dollar and a rise in US Treasury bond yields further pressured precious metals. A stronger dollar makes gold and silver more expensive for holders of other currencies, often leading to reduced demand in international markets.
On the Multi Commodity Exchange (MCX), gold futures for the June contract declined 2.2 per cent over the week, settling at ₹1,52,158 per 10 grams. Silver futures for the July contract witnessed an even steeper correction, plunging 6.9 per cent to close at ₹2,48,537 per kilogram.
Global markets mirrored the downward trend. On the COMEX, silver futures for July fell 8.9 per cent during the week to settle at 69.10 US dollars per troy ounce. Gold futures for the August contract declined nearly five per cent, ending the week at 4,365 US dollars per troy ounce.
Market analysts suggest that the future direction of precious metals will largely depend on upcoming US inflation readings, Federal Reserve policy signals, and broader global economic developments. Any indications regarding interest rate movements could significantly influence investor sentiment toward safe-haven assets such as gold and silver.
Despite the recent correction, precious metals continue to be closely watched by investors as a hedge against inflation, currency volatility, and geopolitical uncertainty.
