Gold and silver prices edged higher in international markets on Monday 26 October, after both metals recorded sharp losses last week. Investors are assessing the outlook for US interest rates, elevated bond yields and crude oil prices ahead of the Federal Reserve's policy decision on 27 to 28 October.

Monday's modest recovery

On COMEX, gold futures were trading at $4,009.50 per ounce, up $1.60, or 0.04%, in the latest available data on Monday. Silver futures were at $54.15 per ounce, up $0.20, or 0.37%. The modest gains follow a steep weekly correction: COMEX gold futures fell $173.20, or 4.14%, last week to settle at $4,007.90 per ounce, while silver futures declined $3.35, or nearly 6%, to $53.95 per ounce.

In India, December gold futures on the Multi Commodity Exchange fell nearly 4% last week to around 1.42 lakh rupees per 10 grams, while silver fell 7.14% to 1.96 lakh rupees per kilogram.

Why metals are under pressure

The Federal Reserve's 27 to 28 October meeting is the key near-term trigger for bullion prices. Investors will look for signals from the policy statement and the Fed chair's commentary on inflation, interest rates and the outlook for monetary easing. Gold does not pay interest, making it relatively less attractive when yields on interest-bearing assets rise, and a stronger dollar makes dollar-denominated bullion more expensive for buyers using other currencies.

If the Fed signals rates could stay elevated for longer, metals could face further pressure; a less hawkish stance could support a recovery. US PCE inflation data due on 29 October is another date traders are watching.