GLOBAL BULLION TRACKER — METALS BRIEF

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Gold and silver opened the week under heavy selling pressure as higher oil prices, rising Treasury yields and renewed expectations for additional Federal Reserve tightening overwhelmed safe-haven demand.

By early Monday morning, gold had fallen to roughly $4,175–$4,190 an ounce, down about 2.5%–3%, while silver traded near $61.50–$62.00, down roughly 4%–5%. COMEX gold futures were around $4,186 and silver futures near $61.38 in early trading.

The move extends last week’s weakness and puts both metals at important technical levels before a data-heavy week for inflation and employment.

The immediate pressure is coming from a familiar chain of events.

Oil prices moved higher again Monday as the U.S.-Iran standoff over the Strait of Hormuz remained unresolved. Iran has maintained conditions for reopening the waterway, while the U.S. has rejected the latest proposal. Brent crude was trading above $106 in early futures trading.

Higher oil matters to gold because it keeps inflation concerns alive. Persistent inflation increases the likelihood that the Federal Reserve keeps monetary policy restrictive — or raises rates again — which can lift Treasury yields and strengthen the dollar.

That combination is particularly difficult for precious metals because gold and silver do not pay interest.

The result Monday morning has been a classic higher oil → higher inflation concern → higher yields → stronger Fed tightening expectations → weaker metals setup.

Wednesday brings the Personal Consumption Expenditures Price Index (PCE) for August.

PCE measures prices across a broad range of consumer spending and is the Federal Reserve’s preferred inflation gauge. The report will be released Wednesday at 8:30 a.m. ET, alongside the third estimate of second-quarter GDP.

With markets already worried about inflation, the report now carries greater significance.

A firm PCE reading could reinforce expectations that the Fed will remain restrictive and potentially raise rates again. That could keep pressure on gold and silver.

A softer reading could challenge the increasingly hawkish market narrative and provide metals with some relief.

The Federal Reserve’s September rate increase has fundamentally changed the backdrop for precious metals.

Markets are no longer debating when the Fed will ease. The question is increasingly whether inflation will force policymakers to tighten further.

Recent Fed commentary has reinforced that shift. Officials have continued emphasizing that inflation remains above target and that monetary policy may need to stay restrictive for longer. Reuters reported last week that markets were assigning a high probability to another rate increase later this year.

That is a meaningful headwind for gold.

Gold continues to benefit from longer-term concerns around sovereign debt, geopolitical uncertainty and reserve diversification. But in the near term, those forces are competing against higher real yields and a stronger dollar.

Monday morning, the rates story is winning.

Silver has been hit much harder than gold.

After recently challenging $70–$71, silver has fallen toward $61–$62, with spot prices down more than 4% early Monday.

That changes the technical setup.

The previous $64–$65 support zone has now been broken, meaning it could become resistance if silver rebounds. The immediate area to watch is now $60–$61.

A sustained break below $60 would represent another deterioration in momentum. Conversely, reclaiming $64–$65 would be the first indication that the current selloff is stabilizing.

Silver still retains a constructive longer-term supply story, but right now macro forces are dominating.

The selloff does not erase the longer-term demand picture.

Global gold-backed ETFs attracted approximately $18 billion in August, the second-largest monthly inflow on record in dollar terms.

ETF holdings increased by 121 tonnes to a record 4,189 tonnes, while assets under management rose to approximately $615 billion. North American and European funds accounted for much of the increase.

That matters because Western investment demand has returned at the same time central banks continue to diversify reserves toward gold.

The distinction is important: short-term price action is being driven by rates and the dollar, while longer-term demand remains supported by institutional and official-sector buying.

Central-bank buying rebounded sharply in Q2. Official institutions added a net 289 tonnes of gold, up 62% from a year earlier and a record for a second quarter. That was more than five times the revised Q1 total of 57 tonnes, reinforcing the longer-term trend of central banks diversifying reserves into gold.

That demand does not prevent corrections, but it remains one of the strongest structural supports underneath the gold market.

The economic calendar gets heavier as the week progresses.

Tuesday, Sept. 29: August Job Openings and Labor Turnover Survey (JOLTS), 10:00 a.m. ET.
Wednesday, Sept. 30: August PCE inflation and Q2 GDP third estimate, 8:30 a.m. ET.
Friday, Oct. 2: September U.S. employment report, 8:30 a.m. ET.

Those reports will give investors fresh readings on labor demand, inflation and economic growth — the variables most likely to influence the Fed’s next move.

Gold and silver are already reacting before this week’s major economic data arrives.

Gold has fallen below $4,200, while silver has dropped toward $61, as rising oil prices, higher yields and renewed Fed tightening expectations outweigh safe-haven demand.

That makes this week’s PCE and employment reports even more important.

If inflation remains firm and the labor market stays resilient, the market may have further reason to price tighter Fed policy. If either begins to weaken materially, the current selloff could be challenged.

The longer-term gold story remains intact: record ETF holdings, continued central-bank buying, geopolitical uncertainty and fiscal concerns remain powerful structural forces.

But for now, the market is sending a clear message:

rates and inflation are back in control.

Sources: U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, Federal Reserve, World Gold Council, Reuters, Investing.com, COMEX Live, Global Bullion Tracker.

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For informational purposes only. Nothing in this publication constitutes investment advice.