Gold and silver settle at their lowest prices in about 9 weeks

By Myra P. Saefong and Joseph Adinolfi

Silver futures have lost nearly 5% week to date

Gold and silver futures ended lower Thursday for a fourth consecutive session, with prices for both metals settling at their lowest since late March as Fitch Ratings' decision to put the U.S.'s AAA credit rating on notice helped boost the U.S. dollar.

Price action

Market drivers

Fitch Ratings Inc. announced Wednesday evening that it was considering a downgrade of the U.S.'s credit rating. The news helped boost the value of the U.S. dollar, while weighing on global stocks and gold.

See:Dow futures dip after Fitch puts U.S. credit ratings on 'ratings watch negative' as debt-ceiling deadline nears

"The debt ceiling drama is getting most of the attention, but a hawkish shift in tone by a list of [U.S. Federal Reserve] officials recently has holstered the dollar and sent policy-sensitive rates (beyond those durations reacting to the debt negotiations) higher," analysts at Sevens Report Research wrote on Thursday's newsletter.

Federal Reserve Gov. Chris Waller is undecided on whether to support another increase in U.S. interest rates in June and said on Wednesday that he won't back a "pause" until he sees more progress on reducing inflation.

Still, minutes released Wednesday afternoon from the Fed's May policy meeting showed that "several" officials said that if the economy evolved as they expected "then further policy firming after this meeting may not be needed."

"Bottom line for gold, if the dollar continues higher and yields extend their recent advance, the 2023 uptrend will likely break," the Sevens Report analysts said. Gold futures trade lower for the month, but has held onto a gain of nearly 5% year to date.

Gold prices in early May had settled at their second-highest level on record, but have since pulled back as the U.S. dollar has strengthened. A stronger dollar makes gold, which is priced in dollars, more expensive for buyers in other currencies.

In a market update Thursday, Michael Hewson, chief market analyst at CMC Markets UK, said the dollar's rise was partly to blame for the prospect of further losses for gold, and a possible move down towards $1,900 for the precious metal.

-Myra P. Saefong

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05-25-23 1416ET

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