Gold and silver had a punishing week, with spot gold down about 2% and spot silver down nearly 3%. The pressure came from rates, not fading safe-haven appeal: a firmer dollar, 10-year Treasury yields near 5.50% and a hot flash PMI have raised bets on another Fed hike in October. Oil swings tied to the US-Iran standoff over Hormuz have added to inflation worries rather than supporting bullion. Central bank buying may cushion further losses. With key support levels broken, traders now look to US inflation and jobs data, Fed commentary and the Iran talks.
PRICE PERFORMANCE
It was a rough week for bullion, though not because people stopped wanting safety. Spot gold fell about 2% to $4,285 an ounce, spot silver lost close to 3%, and COMEX silver dropped 3.5%. Monday’s leg lower came as rising oil prices heightened inflation concerns and reinforced expectations of further Fed rate hikes. A stronger dollar, a violent jump in US bond yields and a growing conviction that the Fed isn’t finished raising rates did the rest.
MACRO BACKDROP & FED POLICY
The Fed lifted rates to 3.75%-4.00% on 16 September, its first hike in three years, and markets spent the whole week digesting it. The real damage came on Wednesday, when the flash US composite PMI jumped to 58.4 from 56.0, the highest since July 2021, with input costs at their strongest since late 2022. Futures now price roughly a 68% chance of another 25 basis point hike in October.
GEOPOLITICAL TENSIONS
The US-Iran standoff around the Strait of Hormuz kept its grip on markets, but it has been working against gold rather than for it. Brent crude swung above $100 and WTI hovered around $92, and each oil spike fed inflation worries, higher yields and a firmer dollar. Houthi missile attacks on Saudi Aramco facilities pushed Brent toward $107 on Thursday.
On Friday, reports that US and Iranian negotiators in New York were exploring a phased deal, with Tehran reopening Hormuz in return for Washington easing its blockade, pulled oil lower and gave bullion a modest bounce. That’s hope, not resolution, though. Iran still won’t budge on its nuclear programme and insists only diplomacy can settle its conflict with the US and Israel, after President Donald Trump said he had rejected an Iranian proposal to reopen the Strait and end the fighting. Oil drifted higher again
CURRENCY MOVEMENT
The 10-year Treasury yield touched about 5.50% today, the highest since 2007, and the 30-year hit its highest since 2004. The Dollar Index climbed from 100.18 to a high of 101.40 before closing at 101.03, up 0.8% on the week and near a two-month high.
INVESTMENT AND RETAIL DEMAND
Some support is building underneath. The People’s Bank of China bought 20.2 tonnes of gold in August, its largest monthly purchase since late 2023, while Poland remains among the year’s biggest buyers. European funds also saw positive net gold ETF inflows in August. That demand could limit how deep a correction runs, since central banks tend to use periods of weakness to add to reserves.
Physical demand in India improved modestly as lower prices drew buyers ahead of the festive season, though it is far from euphoric. The 15% import duty introduced in May keeps domestic prices elevated, and the WGC expects 2026 jewellery and bar-and-coin demand to fall around 10% year on year. Navratri begins in mid-October, followed by Dhanteras and Diwali in early November. If prices stay near current levels, expect bookings and coin demand to strengthen through October.
WEEK AHEAD
This week brings a run of US labour market and inflation data, including job openings, the ADP employment report, the PCE price index and nonfarm payrolls. Stronger-thanexpected readings could keep yields under upward pressure and weigh further on gold. Beyond that, the near-term picture hinges on US inflation data, Fed speakers and any breakthrough or breakdown in the Iran talks.
TECHNICAL OUTLOOK
Spot gold has broken its important support at $4250 (~Rs 150,000), with the next downside targets at $4150-$4100 (~ Rs 145,000 – 147,000).
Spot silver has made Head & Shoulder pattern on daily charts. And prices have broken the neckline support of $62.5(~Rs 230,000), so the next targets are $60(~ Rs 225,000) and $57 (~Rs 220,000).
