Gold and silver under significant pressure – Commerzbank

Gold is already under pressure again this morning – albeit only moderately. Economists at Commerzbank expect the yellow metal downtrend to continue weighing on silver.

Silver unlikely to manage to reverse the trend of its own accord

“One reason for the price slide is the firm US dollar, which is trading close to its highest level since 2002 on a trade-weighted basis. What is more, bond yields have risen further. This has pushed real interest rates back into positive territory for the first time in over two years, which makes gold less attractive as a non-interest-bearing alternative investment.” 

“We expect the Fed to decide tomorrow to raise interest rates by 50 basis points. This should come as no surprise to the market by now, however, and is also fully priced in according to the Fed Fund Futures, so it should no longer weigh on the gold price.” 

“Silver has been under pressure in gold’s slipstream for days. It has also fallen noticeably more sharply than gold. For as long as gold continues to face headwind, silver is unlikely to manage to reverse the trend of its own accord. After all, silver has long had virtually no life of its own.”