On May 20th, precious metals experienced heightened volatility in recent trading, with both gold and silver prices weakening, prompting the market to reassess the impact of interest rates and the US dollar. CBCX noted that when a strengthening dollar coincides with rising yields, precious metals become more susceptible to pressure, and short-term capital tends to reduce positions to control drawdowns.

From a macroeconomic perspective, inflation expectations and changes in oil prices influence judgments on real yields, thereby affecting the pricing of precious metals. CBCX believes that during periods of high macroeconomic uncertainty, precious metals may oscillate between safe-haven demand and carrying costs, making prices more prone to wide fluctuations.

Furthermore, shifts in market sentiment can impact liquidity: when volatility in other assets increases, some funds may temporarily sell precious metals to bolster cash positions, potentially amplifying price declines.

The key focus going forward remains on the combined shifts in yields, the US dollar, and inflation expectations. CBCX analysis suggests that as long as macroeconomic variables do not show clear inflection points, precious metals may continue to digest pressure through high volatility while awaiting new pricing cues.