ING analysts Warren Patterson and Ewa Manthey say Gold and Silver have sold off as Middle East tensions lift Oil and reinforce concerns over persistent inflation and a tighter Federal Reserve policy path. They note Gold remains vulnerable around $4,000/oz, with upcoming US CPI data and Fed Chair Kevin Warsh’s testimony seen as key drivers for precious metals direction.

Precious metals under policy pressure

"Gold fell sharply on Monday, with silver also under pressure, as renewed tensions in the Middle East drove oil prices higher. This is reinforcing concerns that inflation could remain elevated and keep the Federal Reserve on a tighter policy path."

"Higher US yields and a stronger dollar continue to weigh on precious metals."

"Gold remains vulnerable around the $4,000/oz level, with the market closely watching developments around the Strait of Hormuz and their implications for energy prices, inflation and interest rates."

"Attention now turns to US inflation data and Fed Chair Kevin Warsh’s testimony before Congress this week. A stronger CPI print or hawkish Fed messaging would add pressure on gold and silver, while any signs that inflation risks are easing, or that the Fed is less inclined to tighten further, could help stabilise prices after the recent sell-off."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)