Gold, Silver Slip as Bond Yields Climb Ahead of Fed Meeting
Gold and silver fell as bond yields pushed higher, with traders looking beyond the Fed’s near-certain rate reduction for cues on monetary policy next year.
Treasury yields climbed, with investors facing a series of auctions beginning Monday and a Fed rate decision Wednesday that may alter 2026 policy expectations. Higher rates are typically negative for precious metals like gold and silver that pay no interest.
Kevin Hassett, a leading candidate to take over the role of Fed chair, said it would be irresponsible to lay out a plan for rates over the next six months. The White House National Economic Council director emphasized the importance of following economic data on CNBC Monday.
Swap traders continued assigning a near-certain chance of a quarter-point rate cut when the Fed concludes its policy meeting Wednesday. They also leaned toward two more moves by the end of 2026, down from three signaled barely a week ago.
Bets on further easy money by the US central bank have helped silver rally in recent weeks. The metal has more than doubled this year, outshining gold’s 60% surge.
The silver market is also dealing with the aftershocks of a historic short squeeze. One-month lease rates — which represent the annualized cost of borrowing metal in London – remain elevated at around 6%, even after a record amount of metal flowed into the world’s biggest silver-trading hub. These flows in turn have put other centers under pressure: Shanghai’s inventories are near the lowest in a decade.
Options on Comex silver futures have also experienced a buying spree as investors position themselves against wider swings and especially further rallies. Retail traders are pouring into the market, with the five-day average volume on micro futures contracts at a level only exceeded in mid-October, CME Group Inc. data showed.
Meanwhile, China’s central bank added to its gold reserves for a 13th straight month, according to data released on Sunday, bringing the total to around 74.12 million troy ounces.
Silver fell 0.4% to $58.12 an ounce as of 3:56 p.m. in New York. Gold fell 0.1%, while platinum and palladium advanced. The Bloomberg Dollar Spot Index was up 0.1%.
Source : Bloomberg.com
