Gold and silver declined on Thursday as the oil shock fed inflation concerns rather than safe haven buying. In the latest market tables gold fell 2.19 percent to 4,059.20 dollars an ounce, down 2.66 percent on the week, and silver fell 4.24 percent to 54.99 dollars, down 3.26 percent on the week. Intraday reporting on Thursday had COMEX gold futures at 4,129.60 dollars an ounce, down 20.40 dollars or 0.49 percent from the previous close, and silver futures down 0.665 dollars, or 1.15 percent, at 57.045 dollars.
The channel is monetary, not physical. Fresh attacks in Saudi Arabia pushed crude higher, adding to concerns about inflation and the outlook for policy rates, and metals that pay no income lose appeal when markets price rates staying higher for longer. That pressure has outweighed the geopolitical bid for three sessions in India as well, where the India Bullion and Jewellers Association put 24 carat gold down about 953 rupees to around 1.43 lakh rupees per 10 grams on Thursday, with silver down about 8,002 rupees to 2.01 lakh rupees a kilogram, a third consecutive daily fall for both.
The levels still leave both metals far above where they traded before the crisis year, and the week’s pattern, Brent up 5.63 percent on the week while gold falls, is the clearest sign yet that the market is pricing the shock as an inflation and rates problem first and a flight to safety second. The Federal Reserve’s October 27 to 28 meeting is the next scheduled test of that pricing.