Gold and Silver Retreat as Markets Price In a Tighter Federal Reserve

Precious metals fell on Wednesday. Gold traded around $4,078 an ounce, and silver fell about 4.2 percent to roughly $62 an ounce, according to spot pricing. Both metals remain far below the highs they reached earlier this year, when gold approached $5,586 and silver topped $121, as recent market commentary noted. Bitcoin traded near $64,000, also below its earlier levels.

The selling has been attributed to expectations of tighter policy from the Federal Reserve under its new chair, Kevin Warsh, whose approach investors expect to favor higher interest rates rather than cuts. A firmer dollar and the prospect of higher real interest rates reduce the appeal of assets that pay no yield, and have weighed on gold.

The decline runs against a longer-term trend that has not reversed. Central banks continued to add to their gold reserves, buying an estimated 244 metric tons in the first quarter. That steady accumulation reflects official demand for a reserve asset held outside any single government's liabilities, even as the day-to-day price responds to the interest-rate outlook.