Gold and silver erased about $1.05 trillion in combined market value Monday as rising Federal Reserve rate-hike bets, Treasury yields and a stronger dollar intensified selling.
Key Points:
- Gold fell 2.9%, dropping below $4,200 to its lowest level since early August, while silver slid 4.97% to about $61.11.
- CME FedWatch showed roughly 70% odds of an October rate increase, while the 10-year Treasury yield reached 5.20% and the dollar index hit 101.39.
- Technical charts point to $3,943 for gold and $54.51 for silver if bearish patterns continue, while stronger closes would weaken those setups.
Gold Silver Sell-Off
Gold’s market value stood near $30.04 trillion before the drop, with the 2.9% decline erasing about $871 billion. Silver started near $3.65 trillion and lost roughly $180 billion, taking the combined decline to about $1.05 trillion.
Gold traded near $4,160 after a 2.91% daily decline and fell below $4,200 to its lowest level since early August. Silver fell faster, dropping 4.97% to about $61.11.
The pressure came from several markets at once, with higher Fed hike odds reducing the appeal of non-yielding metals as Treasury yields climbed. Brent crude near $107 also added to inflation concerns after stalled U.S.-Iran talks, while a stronger dollar made metals more expensive for overseas buyers.
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Beth Hammack Signals
Cleveland Fed President Beth Hammack signaled last week that monetary policy should remain restrictive, reinforcing expectations that borrowing costs could stay high. Higher rates generally weigh on assets that do not pay interest.
Gold’s daily chart confirmed a head-and-shoulders pattern after the price broke a neckline near $4,320 in mid-September. The measured target sits near $3,943, around the 0.5 Fibonacci retracement, while a daily close above $4,400 would weaken the bearish setup.
Silver broke below $62.87, a level that had held in June, August and mid-September, and its next bearish target sits near $54.51. A recovery above $62.87 followed by a break through the $66 to $69 zone would invalidate that outlook.
Markets now turn to U.S. labor data, with ADP payrolls due Wednesday, ISM Manufacturing and jobless claims Thursday, and nonfarm payrolls Friday. Friday’s jobs report is the main test.
A stronger reading could support higher rate expectations, while weaker data could ease some of the pressure on gold and silver.
The latest drop follows several weeks of weakening technical structure in both metals. Gold spent two weeks retesting the $4,300 to $4,400 area after its mid-September neckline break, while silver was rejected three times in the $66 to $69 zone since late August.
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