Silver slumps to two-year low, gold extends string of declines

Gold and Silver Bar Bullion

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Gold sinks to six-year lows and silver slides to its lowest in more than two years, in an environment of a strengthening dollar and rising global bond yields.

December Comex gold (XAUUSD:CUR) -1.2% to $1,705.60/oz, and December silver (XAGUSD:CUR) -1.5% to $17.61/oz after falling as much as 2.4% in earlier trading.

ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (SIL), (NYSEARCA:SLV), (SIVR)

Gold is coming off a fifth straight month of declines on expectations that the Federal Reserve will keep interest rates high to try to tame inflation, and money markets are pricing in 125 basis points of tightening by the European Central Bank by October.

UBS analyst Giovanni Staunovo said recently that he expects gold to fall to $1,600/oz by year-end, and Wolfpack Capital's Jeff Wright foresees gold in the $1,600-$1,650 range in early September, as "a restrictive monetary policy is not friendly for gold."

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