Analysts noted that this reduced the likelihood of a September rate cut, curbing investor appetite for non-yielding assets like gold and silver.
"The Fed appears to be keeping its tightening bias alive, and that makes it difficult for precious metals to build sustained momentum," said a Singapore-based commodities strategist. The US Dollar extended gains on the hawkish tone, adding to the headwinds for metals priced in the greenback.
The metals market also absorbed geopolitical and political developments that shaped investor sentiment. Optimism surrounding potential progress in Russia-Ukraine peace efforts has eased safe-haven demand. Russian Foreign Minister Sergey Lavrov reiterated that any security arrangement would be incomplete without Moscow's involvement, underscoring the complexity of negotiations.
Meanwhile, US domestic politics injected uncertainty into markets. Former President Trump's demand for the resignation of Federal Reserve Governor Lisa Cook over alleged mortgage fraud has stirred debate about central bank independence.
Political instability, while weighing on the US Dollar's long-term outlook, has provided limited support for gold and silver in the near term.
Looking ahead, investor attention is firmly on Fed Chair Jerome Powell's upcoming remarks at the Jackson Hole Symposium. Markets expect Powell to offer critical guidance on the policy path, particularly regarding the balance between inflation risks and slowing growth.
Alongside Powell's speech, flash PMIs, weekly jobless claims, and the Philadelphia Fed Manufacturing Index will provide essential signals on global economic momentum.