(Kitco NewsWire) - Spot gold and silver prices are sharply higher ahead of the North American market open Tuesday, as a softer-than-expected U.S. CPI report reduced Fed-rate pressure and helped metals recover despite another spike in crude oil tied to U.S.-Iran tensions. At the time of writing, spot gold was trading near $4,089.10 an ounce, up 2.22%, while spot silver was trading near $59.12, up 2.78% on the session.
Gold’s early range was $3,985.00 to $4,101.50, leaving the metal back above the $4,000 area and testing the $4,091 resistance zone identified in the latest technical setup. Silver’s early range was $56.76 to $59.45, with the metal recovering the $58.00 area and testing resistance near the 50-period moving average.
This morning’s CPI report shifted market positioning back in favor of precious metals. Headline CPI fell 0.4% in June after rising 0.5% in May, the largest monthly decline since April 2020, while the 12-month rate slowed to 3.5% from 4.2%. Core CPI was unchanged on the month and eased to 2.6% year over year from 2.9%. The data undercut the inflation scare that followed last week’s oil rally and Wednesday’s Fed minutes, reducing pressure on traders to price another near-term Fed hike. The 10-year Treasury yield remained in the 4.6% area but moved off its early highs, while the U.S. dollar index softened as the market faded part of the higher-for-longer trade.
The Strait of Hormuz situation is best characterized as open transit under severe military and shipping risk, not a normal operating environment and not a fully resolved blockade. Oil prices jumped again after the U.S. and Iran traded strikes, with Brent crude near $86.73 and Nymex WTI near $80.55 in early trade. The latest escalation keeps a geopolitical risk premium under oil and a defensive bid under gold, but the soft CPI print has changed the immediate market transmission. For gold and silver, lower inflation data is now offsetting the oil-driven inflation channel; for broader markets, the setup is oil bid, equities mixed, yields off their highs and the dollar softer.
Traders are watching Fed Chair Kevin Warsh’s congressional testimony, follow-through in Treasury yields after the CPI print and any further disruption to Hormuz shipping lanes. A sustained break above the $4,091 to $4,107 resistance area would improve gold’s short-term setup, while another oil spike would keep the market focused on whether energy inflation reappears in July data.
The key outside markets see Nymex WTI crude oil prices sharply higher and trading around $80.55 a barrel, while Brent crude was near $86.73. The U.S. dollar index is softer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.6% area.
Technically, spot gold bulls' next upside price objective is to push prices back above $4,091, with a sustained move targeting the 50-period moving average near $4,087 and then $4,140. Bears' next near-term downside price objective is a break below $3,959, with deeper downside targets at $3,942 and then $3,886. First resistance is seen at $4,091 and then at $4,140. First support is seen at $4,021 and then at $3,959.
Spot silver bulls' next upside price objective is to drive prices back above the 50-period moving average near $59.61, with a move above that level targeting $61.71 and then $62.81. The next downside price objective for the bears is a break below $57.73, with deeper downside targets at the $56.00 to $58.00 accumulation zone and then $55.60. First resistance is seen at $59.61 and then at $61.71. Next support is seen at $57.73 and then at $55.60.
