Gold, silver recover as softer dollar supports bullion: Kotak Securities
Bullion remains under pressure as strong US data and hawkish Fed signals lift rate-hike expectations, while oil prices retreat as markets weigh geopolitical risks against possible diplomatic progress.
Gold settled near $4,275 an ounce on Thursday, while silver fell around 1% to $63.8, pressured by a firmer dollar and higher Treasury yields. (AI Image)
Spot gold edged higher on Friday, moving back above $4,300 an ounce, while silver climbed to $65, recovering from two sessions of declines. The rebound was supported by a softer US dollar and stabilization in bond markets after a sharp rise in yields.
Despite the recovery, bullion remains on track for a weekly loss as elevated energy prices, persistent inflation concerns and resilient US economic data continue to reinforce expectations for further Federal Reserve tightening.
Gold settled near $4,275 an ounce on Thursday, while silver fell around 1% to $63.8, pressured by a firmer dollar and higher Treasury yields. The dollar index reached a two-month high near 101.40, while the 10-year Treasury yield climbed to 5.18%, its highest level since 2007, following stronger US data and renewed expectations of a rate increase.
“Markets are now pricing roughly a 70% probability of a 25-basis-point hike in October. Weekly jobless claims fell to 197,000, while August new-home sales rose 6.4% to 684,000. Fed officials maintained a hawkish stance, with several policymakers signaling that further tightening could still be warranted,” said Kaynat Chainwala, AVP Commodity Research, Kotak Securities.
Looking ahead, further softness in oil, the dollar, and yields could support bullion, while stronger data and hawkish Fed guidance remain headwinds.
Crude prices eased on Friday, with both benchmarks pulling back from Thursday’s highs as markets partially unwound the geopolitical risk premium. Brent slipped below $105.50 a barrel and WTI eased toward $92, after Thursday’s 3% rally that took Brent to $106.60 and WTI to $94.61. The Thursday surge followed Saudi Arabia’s interception of six Houthi ballistic missiles targeting the Yanbu export hub and Taif, an incident that, while neutralised, was sufficient to reprice supply‑disruption risk into the curve.
Friday’s pullback reflects reduced immediate escalation concerns rather than a fundamental improvement in the regional risk outlook, as reports emerged that US and Iranian negotiators are exploring a phased framework to reopen the Strait of Hormuz.
This has left the market pricing two competing scenarios simultaneously: escalation risk from further attacks on Saudi infrastructure versus a diplomatic off‑ramp that could restore flows through the strategic chokepoint.
“Near‑term direction will be dictated by the substance of the US‑Iran talks, specifically whether a credible Hormuz reopening framework materializes alongside any further Houthi provocations and upcoming inventory data, which should determine whether the current pullback extends or reverses,” said Chainwala.
