Gold and silver prices experienced significant declines in midday U.S. trading on Thursday, driven by concerns over decreasing global demand for metals. Gold prices fell to a more-than-two-week low, while silver reached a 2.5-month low. As of the latest update, August gold was down $53.60 at $2,362.30, and September silver had dropped $1.231 to $28.09. The declines were attributed to heavy profit-taking and weak long liquidation from futures traders.
China’s central bank unexpectedly reduced its one-year lending facility rate by 0.2% to 2.30% on Thursday, following a previous short-term rate cut. This move has intensified worries about the health of the world’s second-largest economy, adding pressure on global markets and negatively impacting metals due to weakened demand expectations.
In the U.S., the advance second-quarter GDP report showed a 2.8% year-on-year increase, surpassing the 2.1% forecast. This stronger-than-expected data likely dampens speculation about potential Federal Reserve interest rate cuts at next week’s FOMC meeting, contributing to additional selling pressure in gold and silver markets.
Traders are now looking ahead to Friday’s U.S. personal income and outlays report, which includes key inflation indicators.
In broader market developments, the U.S. dollar index is slightly weaker. Nymex crude oil prices have recovered to around $78.00 per barrel after hitting a six-week low earlier today. The benchmark 10-year U.S. Treasury note yield stands at 4.235%.
