Gold and silver prices tumbled sharply on Friday, driven by rising US Treasury yields and a strengthening dollar, factors that are also casting a shadow over the cryptocurrency market. COMEX gold fell 2.4% to $4,573.30 an ounce, while silver crashed nearly 8% to $78.705, extending losses from Thursday’s session. The decline in precious metals underscores a macro environment where higher yields and a hawkish Federal Reserve are diminishing the appeal of non-yielding assets — a dynamic that could pressure Bitcoin and other digital currencies.
Benchmark 10-year US Treasury yields climbed to a near one-year peak, raising the opportunity cost of holding assets like gold that generate no interest. The dollar gained over 1% this week, making bullion more expensive for overseas buyers. These same forces are often headwinds for cryptocurrencies, which despite their digital nature, are frequently correlated with risk-on assets and can suffer when liquidity tightens. The latest US inflation data showed energy-driven price pressures, with crude oil up 6% weekly due to the Iran conflict keeping the Strait of Hormuz largely closed, reinforcing expectations that the Fed will keep rates elevated, or even hike further.
“The decline (in gold) was driven by a fresh wave of inflation data that cemented expectations the Federal Reserve will hold rates at elevated levels through year-end — and increasingly, that the next move could be a hike rather than a cut,” said Gary Wagner, technical analyst at Kitco News. The Trump-Xi summit yielded no concrete market relief, preserving geopolitical uncertainty but failing to offset the rate headwind. For Bitcoin, which has often been touted as digital gold, such macro currents could undermine its safe-haven narrative when real yields rise. ANZ cut its year-end gold forecast by $200 to $5,600, reflecting similar downside risks for assets sensitive to monetary policy.
Strong US retail sales, rising 0.5% in April, further strengthened the case for the Fed’s restrictive stance. With rate cuts largely priced out for 2025, according to the CME FedWatch tool, the liquidity environment remains challenging. If the Strait of Hormuz tensions ease further, energy prices and inflation expectations could moderate, potentially offering some relief. Until then, the momentum in both metals and risk assets like crypto appears tilted to the downside.
