DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Gold and silver prices tumbled Monday as rising government bond yields weakened investor demand for precious metals. The decline hit assets that do not pay interest especially hard as investors continued watching inflation and the potential for additional Federal Reserve rate increases.

The pressure was visible across both futures and spot markets. Gold and silver each recorded steep losses, while silver suffered the larger decline among the two metals.

Gold futures sank 3.34% to $4,176.80. Spot gold was down 3.27% at $4,145.88 around 5:40 a.m. E.T., putting both major gold measures firmly lower during the trading session.

Silver endured an even sharper drop. Silver futures were last trading 5.1% lower at $61.52 per troy ounce, while spot silver had fallen 4.92% to $61.11.

The metals selloff quickly spread to mining companies listed in the United States. Shares of major gold and silver producers dropped in premarket trading as the underlying commodities retreated.

Sibanye Stillwater, a major gold producer that is also involved in platinum and palladium markets, fell 7.92% ahead of Monday’s market open. Its decline was the largest among the gold producers cited.

Harmony Gold Mining dropped 7.49% before the opening bell. Newmont Corporation also moved lower, losing 4.72% in premarket trading as weakness swept through the group.

Silver mining companies faced similarly heavy selling pressure. Silvercorp Metals declined 7.13%, exceeding the losses recorded by the silver futures and spot prices cited in the market snapshot.

Endeavour Silver shed 5.86% in premarket trading. Hecla Mining dipped 5.55%, completing a broad retreat among the listed silver producers included in Monday’s early market moves.

The downturn came while investors continued monitoring inflationary pressure and the possibility of further interest rate increases from the Federal Reserve. Surging government bond yields provided the backdrop for the sharp move away from gold and silver.

Higher yields can cool demand for assets that do not generate interest, including precious metals. Monday’s price action reflected that challenge across gold, silver and the shares of companies that mine them.

The figures showed that losses in mining stocks were not limited to one metal or company. Every gold and silver producer cited was trading lower before the regular market open.

The largest mining stock declines also exceeded the percentage losses reported for gold and silver themselves. Sibanye Stillwater, Harmony Gold Mining and Silvercorp Metals each fell by more than 7% in premarket trading.

Gold’s immediate direction remains tied in part to whether additional rate increases succeed in restraining inflation, according to Max Baecker, president of American Hartford Gold. His comments outlined different implications for gold depending on inflation and economic conditions.

“If hikes bring inflation under control, gold faces sustained pressure,” Baecker said in a note Friday. “If inflation sticks or economic stress builds, demand for gold as a diversifier holds.”

Baecker added that rates are “just one piece of the gold story,” pointing to purchases by global central banks. Those institutions bought a record 289 metric tons during the second quarter.

He viewed those central bank purchases as a longer term reserve strategy that is separate from Federal Reserve rate decisions. That distinction placed official sector buying alongside, but apart from, the immediate pressure created by rates and bond yields.

For Monday’s market, however, falling metal prices and weaker mining shares dominated the early action. Silver posted the steeper commodity decline, while several gold and silver miners suffered even larger percentage losses before the opening bell.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.