Precious metals decline in global markets driven by bonds and the dollar

A strengthening dollar and rising US Treasury yields created selling pressure across commodity markets, particularly affecting metals. While the ounce price of gold declined, supply risks in the Middle East and the G7 countries' decision to release reserves influenced the energy group.

Bond Yield and Dollar Rise

With selling pressure in global bond markets, the US 10-year Treasury yield rose to 5.34 percent and the 30-year yield to 5.69 percent, reaching their highest levels since 2002, before later balancing at 5.28 percent and 5.61 percent, respectively.

The dollar index, finding support from this rise in bond yields, managed to complete the week with a 1 percent increase at the 101.9 level.

Fed Expectations and Data

Inflation and employment data announced in the US weakened expectations that the Fed would go ahead with a rate hike in the near term.

The core personal consumption expenditures price index increased by 3 percent annually in August, while non-farm payrolls rose by 29 thousand people in September, remaining below expectations, and the unemployment rate climbed to 4.2 percent.

Losses in Precious Metals

Rising bond yields increased the alternative cost of non-yielding precious metals, while appreciation in the dollar pressured prices downward.

While the ounce price of gold completed the week at 4,141 dollars, declines of 8 percent in palladium, 6.1 percent in silver, 4.6 percent in platinum, and 3.4 percent in gold were recorded.

Base Metals and Energy Group

In base metals, a strengthening dollar, high energy costs, and concerns regarding global demand suppressed prices.

While Middle East-derived supply risks influenced oil prices, G7 leaders decided to release 100 million barrels from reserves over a period of 4 months.