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Fed Rate Hike Fears Send Gold and Silver Tumbling
15 Nov
Summary
- Gold and silver futures recovered Friday but saw steep weekly losses.
- US inflation data fueled expectations of a Federal Reserve rate hike.
- Indian wedding demand and central bank buying may cushion gold prices.
Precious metals, gold and silver, saw a minor recovery on Friday, but sustained steep weekly losses. This price correction was primarily triggered by hotter-than-expected US inflation figures, which amplified market expectations for a Federal Reserve rate hike. The rise in bond yields and a stronger dollar also contributed to the pressure on these non-yielding assets.
Despite the recent downturn, which saw gold prices hit a year-to-date low, analysts anticipate that demand from India's wedding season and consistent buying by central banks may offer some support. However, the immediate outlook remains cautious, with key resistance levels to be overcome for a significant recovery.
Traders are closely watching upcoming Federal Reserve meeting minutes for further clues on future interest rate trajectories. Any indication of a more hawkish stance could exacerbate the pressure on gold and silver prices in the coming week.
