Gold, silver pressured by hawkish central banks

Gold and silver prices are hesitantly lower in midday US session on Tuesday. Hawkish signals on monetary policies from the US central bank as well as other major central banks cast greyish shades on the stock and financial markets at the present moment.

The hawkish tone with expectations of aggressive tightening have boosted US Treasury yields and the US dollar index, both of which are competing assets with the safe-haven metals.

Earlier October delivery gold was last down $4.70 at $1,662.90, after that, at the time of writing the precious metal is trading between $1664.50 and $1664.95, while December silver was down $0.148 at $19.270.

Risk aversion is still elevated among traders and investors early this week. Markets’ focus is on the FOMC meeting that began Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell.

The FOMC is expected to remain aggressively hawkish and raise the key U.S. Fed funds rate by 0.75% in the Fed’s effort to tamp down problematic price inflation. Sweden’s central bank today raised its key interest rate by a full 1.0%. The Bank of England also holds its monetary policy meeting Thursday and is also expected to raise interest rates.

Global stock markets were mixed overnight, with European shares mostly lower and Asian shares mostly higher. US stock indexes are lower at midday.