Gold and silver prices fell on Tuesday, October 27, as the US dollar strengthened and investors waited for the Federal Reserve’s interest-rate decision. Gold dropped to $4,024.70 an ounce, while silver fell to $53.44. Ricardo Evangelista said, "Inflation worries, driven by high oil prices, are keeping the Fed tight."
Synopsis
Gold and silver prices are under pressure as a stronger US dollar and concerns about interest rates weigh on the metals market. Gold is holding near $4,025, while silver has fallen below $54. One analyst says gold could test $3,900 if the Fed sounds hawkish or Thursday’s PCE inflation data comes in hot.
Gold and silver prices fell on Tuesday, October 27, as the US dollar strengthened and investors waited for the Federal Reserve’s interest-rate decision. Gold was down 0.34% at $4,024.70 an ounce, while silver fell 1.67% to $53.44.
Gold Price Today: stronger dollar and rate bets
Spot gold fell 0.5% to $3,995.89 an ounce. December US gold futures dropped 0.71% to $4,009.60. The dollar index rose 0.3% and hit a near two-week high. A stronger dollar makes gold costlier for buyers who hold other currencies, which usually lowers demand.
Interest rates are the second factor. Gold pays no interest, so higher rates raise the cost of holding it. The Fed is expected to leave rates unchanged on Wednesday. But the CME FedWatch tool shows an 80% chance of a hike in December. Ricardo Evangelista of ActivTrades said inflation worries, driven by high oil prices, are keeping the Fed on a tight policy path.
Brent crude is trading around $116 a barrel after renewed Houthi attacks on Saudi Arabia. Higher oil prices add to inflation fears, which back the case for higher rates.
Several events this week could move prices:
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Wednesday: The Fed announces its decision, and the UK budget is released.
After the Fed: The Bank of Japan holds its meeting.
Thursday: The European Central Bank is expected to keep rates unchanged. US PCE inflation data is also due. The Fed watches PCE most closely as it aims for 2% inflation.
Evangelista said a hawkish message from the Fed, or PCE data that comes in above forecasts, could push gold below $4,000 and possibly toward $3,900.
Silver Price Today: July low breaks
Silver traded near $53.31 on CMC Markets, down 1.38% on the day. On Friday, 23 October, it fell below its July low of about $54.70. That level had held as support for months. Michael J Kramer of Mott Capital Management says it may now act as resistance. He sees room for a fall to the $47–$49.50 range. The chart marks levels at $49.61 and $47.13.
The wider trend is down. Silver has dropped since peaking near $70 in late August.
Two indicators back the weak view:
RSI: The 14-day reading is about 31.3. Below 30 is seen as oversold, so Kramer says silver has not reached that point and could fall further.
Moving average: The price sits under its 10-day average of about $56.41, which is another hurdle on any bounce.
Kramer also says the dollar index looks set to climb. It appears to be coming out of a bull flag and forming an inverse head-and-shoulders pattern, both seen as bullish for the dollar. If the dollar keeps rising, silver would likely face more pressure. CMC client data shows 87% of its traders are long on silver and 13% are short.
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