(Kitco NewsWire) - Spot gold and silver prices are firmer in early U.S. trading Monday, as lower crude oil prices eased the inflation impulse from the Gulf conflict while a softer U.S. dollar added modest support. At the time of writing, spot gold was trading near $4,047.90 an ounce, up 0.15%, while spot silver was trading at $57.570, up 0.22% on the session.
The post-Fed setup remains rate-sensitive rather than purely haven-led. The Federal Reserve held the target range for the federal funds rate at 3.50% to 3.75% last Wednesday in a 9-3 decision. June PCE data later showed headline inflation down 0.1% on the month and up 3.7% from a year earlier, while core PCE rose 0.1% on the month and 3.3% year over year. Initial jobless claims rose 9,000 to 197,000 in the week ended July 25, still leaving the labor-market signal firm enough that traders entered Monday pricing roughly a two-thirds chance of a September rate hike.
Fed Chair Kevin Warsh’s press conference left the market with a hawkish-hold interpretation rather than a dovish pause. The combination of three dissents, elevated core inflation and limited forward guidance kept front-end rate expectations firm, but Monday’s crude-oil drop pulled Treasury yields lower and took some pressure off inflation breakevens. The next test is the July employment report, due Friday at 8:30 a.m. ET, with ISM manufacturing due Monday at 10:00 a.m. ET, JOLTS due Tuesday at 10:00 a.m. ET and ADP employment due Wednesday at 8:15 a.m. ET.
The Strait of Hormuz risk premium has cooled but has not cleared. President Donald Trump called off planned strikes on Iran and said talks would take place Monday, while Iranian officials denied direct U.S. negotiations and said Tehran was engaged with Oman on the waterway. Brent crude fell to around $83.70 a barrel and WTI traded near $79.50 to $79.75, reversing part of July’s conflict premium. The immediate read-through is supportive for risk assets and lower for oil-linked inflation expectations, while gold is getting a mixed impulse: less panic demand from Gulf risk, but lower yields and a softer dollar.
“An upbeat but guarded start for the metal,” said Tim Waterer, chief market analyst at KCM Trade, in early bullion commentary. That fits Monday’s price action: gold and silver are bid, but neither market has yet forced a break from the consolidation ranges that developed after last week’s Fed meeting.
The key outside markets see Nymex WTI crude oil prices sharply lower and trading around $79.50 a barrel, while Brent crude was near $83.70. The U.S. dollar index is softer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area.
Technically, spot gold bulls' next upside price objective is to push prices back above the $4,087.00 to $4,116.00 resistance zone, with a sustained move targeting $4,150.00 and then $4,200.00. Bears' next near-term downside price objective is a break below $4,051.00, with deeper downside targets at $4,021.00 and then $4,000.00. First resistance is seen at $4,087.00 and then at $4,116.00. First support is seen at $4,051.00 and then at $4,021.00.
Spot silver bulls' next upside price objective is to drive prices back above the $59.14 to $60.09 area, with a move above that zone targeting $60.99 and then $64.00. The next downside price objective for the bears is a break below $57.82, with deeper downside targets at $56.68 and then $55.00. First resistance is seen at $59.14 and then at $60.09. Next support is seen at $57.82 and then at $56.68.
