(Kitco NewsWire) - Spot gold prices are slightly higher and spot silver prices are weaker ahead of the North American market open Friday, as traders weighed this week’s softer inflation data against resilient U.S. economic readings, firm Treasury yields and renewed Strait of Hormuz risk. At the time of writing, spot gold was trading near $3,981.50 an ounce, up 0.16%, while spot silver was trading near $55.08, down 0.57% on the session.
Gold’s early range was $3,970.20 to $4,008.70, leaving the metal below the $4,000 area after Thursday’s break but above the $3,970 session low. Silver’s early range was $54.65 to $56.12, with the metal holding above $54.65 but remaining below the $55.60 to $57.52 resistance area identified in the latest short-term setup.
Positioning after the latest significant U.S. economic data remains less supportive for precious metals than the initial CPI and PPI reaction suggested. Headline CPI fell 0.4% in June and final-demand PPI fell 0.3%, but retail sales rose 0.2%, initial jobless claims fell to 208,000 and the Philadelphia Fed manufacturing index jumped to 41.4. The data mix reduced the urgency around a July Fed move but did not give traders enough evidence to price a clean dovish pivot. Fed funds futures show roughly a 90% probability of no change at the July 29 meeting, while the 10-year Treasury yield was near 4.53%, the 2-year yield was near 4.12% and DXY was little changed near 100.80. That leaves gold supported by softer inflation, but capped by resilient activity data and yields that remain elevated.
The Strait of Hormuz situation is best characterized as restricted and highly stressed transit under active military pressure, not a normalized shipping environment. The U.S. expanded strikes on Iranian infrastructure around the Gulf, including port and transport assets, while Iran retaliated against U.S.-allied targets in the region. The conflict has not produced a fully verified closure of the strait, but the risk premium remains embedded in crude oil, with Brent trading in the mid-$80s and WTI near the $80 area. For gold, the impact remains two-sided: geopolitical risk supports defensive demand, but higher oil prices feed inflation concerns, keep yields firm and limit the metal’s ability to hold a safe-haven bid. For broader markets, the setup is oil bid, bonds supported after Thursday’s yield retreat, the dollar steady and silver underperforming gold.
Traders are watching Fed commentary, any follow-through in rate expectations after this week’s inflation, retail sales and labor data, and further disruption to Hormuz shipping lanes. A sustained recovery above $4,000 would ease immediate downside pressure in gold, while another crude-oil spike would keep the market focused on whether energy inflation can offset the softer June CPI and PPI readings.
The key outside markets see Nymex WTI crude oil prices firmer and trading near the $80.00 area, while Brent crude was near the $86.00 area. The U.S. dollar index is steady near 100.80. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.53% area.
Technically, spot gold bears have the overall near-term technical advantage as prices remain below the psychologically important $4,000 level after breaking lower on Thursday. Bulls' next upside price objective is to push prices back above $4,000, with a sustained move targeting $4,008.70 and then $4,044. Bears' next near-term downside price objective is a break below $3,970.20, with deeper downside targets at $3,959 and then $3,942. First resistance is seen at $4,000 and then at $4,008.70. First support is seen at $3,970.20 and then at $3,959.
Spot silver bears have the overall near-term technical advantage as prices remain below $55.60 and continue to trade near the lower end of the latest breakdown range. Silver bulls' next upside price objective is to drive prices back above $55.60, with a move above that level targeting $57.13 and then $57.52. The next downside price objective for the bears is a break below $54.65, with deeper downside targets at $53.42 and then $50.00. First resistance is seen at $55.60 and then at $57.13. Next support is seen at $54.65 and then at $53.42.
