Interest Rates Remain Key Driver for Gold, Silver as Fed Approaches July 28-29 Meeting

According to StoneX analyst Rhona O'Connell, interest rates remain the primary price driver for gold and silver, despite escalating Middle East geopolitical tensions. Speaking on Monday, O'Connell noted that the 10-year yield's rise from below 4% in late February to 4.6% has created headwinds for both metals.

With the Federal Reserve's July 28-29 policy meeting approaching, FOMC members are divided on the path forward, with roughly 50% favoring further rate increases if inflation persists and the rest preferring to hold steady. O'Connell cited recent comments from Fed Governor Chris Waller, who signaled potential rate hikes if incoming inflation data remain strong. Latest CFTC data to July 14 showed gold longs at 436 tonnes—23% below the 12-month average—while silver longs fell 9% to 2,822 tonnes, sitting 41% below historical norms, signaling weak positioning in both metals.