Gold and Silver Retreat as Traders Sit on Sidelines Ahead of Fed Decision
Precious metals slid on Tuesday with spot gold dropping to near $4,028 and silver falling to around $57, as traders held back ahead of Wednesday's Federal Reserve policy announcement.
Precious metals finished lower today (July 28th, Tuesday) as traders considered their risk positions before the Federal Reserve's highly anticipated policy decision on Wednesday.
Spot gold traded at around $4,028.69 an ounce, a decline of over 1%, while spot silver traded around $57, shedding 1.9% on the day. Gold fluctuated within a $4,011 to $4,083 band, managing to stay above the psychological floor but failing to reclaim the $4,100 retracement zone that now acts as overhead resistance. Silver moved between $56.5 and $58.75, once again unable to breach the $60.00 resistance level.
Treasury yields edged lower, with the 10-year note drifting to 4.604% and the 2-year dipping to 4.275%, while the U.S. dollar index held steady near 101.40. Typically, declining yields offer a tailwind for non-yielding assets like gold, but the yellow metal could not capitalize as the near-term rate trajectory remains uncertain.
Fed funds futures continue to price a pause for Wednesday, yet the market assigns roughly a one-in-three chance of a surprise rate increase and is still factoring in tightening risk later in the year. Traders are also eyeing Chair Kevin Warsh's press conference.
Crude oil also tumbled as U.S.-Iran framework discussions progressed and Washington mentioned it preferred to avoid additional escalation. Brent crude sank to near $82, while WTI fell below $80. The oil pullback lowered the immediate inflation impulse that had been weighing on gold price, but traders are still focusing their attention to the Fed's decision tomorrow.
Related assets: Gold, Silver, Crude Oil, Brent Crude