Gold and silver saw gains of 4% and 2%, respectively, driven by rate-cut expectations, heightened political risks, a steepening yield curve, and worries about the Fed’s independence. After a weaker-than-expected performance, gold reached a new high above $3650 and silver above $42. Non-farm payrolls in August increased the anticipation of a rate drop by the Fed in September. August nonfarm payrolls fell short of expectations of 75,000 and only gained 22,000 jobs. Unemployment slightly increased to 4.3% from 4.2%, and June was revised down by 27,000 to a loss of 13,000 people.

Gold also attracted safe-haven flows earlier last week due to uncertainties around legal challenges to broad U.S. import tariffs and worries over stretched government debt in developed nations that raised sovereign yields. The 10-year Treasury note is down more than eight and a half basis points to 4.076%, reflecting a decline in US Treasury yields. US real yields have dropped almost nine basis points to 1.696%, which is determined by deducting inflation expectations from the nominal yield.

Since most silver is a byproduct of base metal mines and new primary output reacts slowly, projections indicate a significant structural deficit in 2025. Silver is also receiving support as the macro impulse met a tight physical market where industrial demand from solar, electric vehicles, and electronics is rising while supply remains constrained.

Russia also launched its largest airstrike of the conflict against Ukraine over the weekend. According to Ukrainian President Volodymyr Zelensky, the barrage of drones and missiles killed four people and severely damaged the country’s north, south, and east.

Market players will keep a careful eye on headlines related to the situation between Russia and Ukraine. Even if US economic data initially favorably affects the USD’s valuation, Gold’s and Silver’s downward corrections may be restricted till the conflict de-escalates.

Dr.Renisha Chainani, Head- Research, Augmont