Gold and silver prices continued to slide on Tuesday, pressured by a firmer dollar, rising Treasury yields and downbeat economic data from top metals consumer China.
December gold futures fell around $14 or 0.7% to trade near $1,953 per ounce. December silver also dropped almost 0.6% to $23.975 per ounce.
The declines came as the US dollar hit a 20-year peak and benchmark 10-year Treasury yields climbed back above 3.5%, diminishing the appeal of non-yielding bullion.
A stronger dollar makes gold more expensive for overseas buyers, while higher yields boost the opportunity cost of holding the metal. Upbeat services data on Monday pointed to persistent underlying US inflation.
Sentiment was also dampened after China reported slower-than-expected growth in its services sector for August. The figures added to recent signs of weakening momentum in the world’s number two economy, clouding the metals demand outlook.
Technically, silver has negated its short-term downtrend but remains stuck below the recent peak of $25.42 an ounce. Gold is still in an uptrend but barely holding support around $1,950.
More significant resistance awaits near $25.50 for silver. But failure to regain this area could see selling pressure intensify as investors eye the August trough near $22.50.
For now, gold and silver both appear vulnerable as dollar strength persists alongside rising yields. But any pullback in yields or softening in US rate hike bets could revive metals buying interest.
