(Kitco NewsWire) - Spot gold and silver prices are higher in late-afternoon U.S. trading Monday, as a weaker U.S. dollar and lower Fed-hike expectations supported precious metals even as a rally in crude oil lifted Treasury yields and pressured equities. At the time of writing, spot gold was trading near $4,414.30 an ounce, up 0.88%, while spot silver was trading at $65.650, up 1.66% on the session.
North American equity markets closed lower as the oil move revived inflation concerns. The S&P 500 fell 40.39 points, or 0.52%, to 7,745.37, the Dow Jones Industrial Average lost 272.39 points, or 0.51%, to 53,460.02, and the Nasdaq Composite slipped 84.25 points, or 0.32%, to 26,644.91. European markets also finished weaker, with the STOXX Europe 600 down 0.22% to 656.41, London’s FTSE 100 down 0.28% to 10,720.30, Germany’s DAX down 0.38% to 26,338.61 and France’s CAC 40 down 0.66% to 8,579.60.
The latest positioning remains defined by softer U.S. data meeting a renewed oil shock. Last week’s retail-sales miss, cooler CPI, flat headline PPI and weaker consumer sentiment reduced the market’s appetite to price another September rate hike, but this morning’s Empire State survey showed the general business conditions index rising to 20.6, its strongest reading in more than 4 years, while the prices-paid index climbed to 58.6. The 10-year Treasury yield rose toward 4.73% as crude jumped, keeping the rates channel mixed for gold: the weaker dollar and lower Fed-hike odds support the metal, while higher yields cap the rally. The next major U.S. rates catalyst is the Fed’s July meeting minutes Wednesday at 2 p.m. ET, followed by flash PMI readings Friday.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. U.S.-Iran peace talks remain stalled, tanker traffic through the strait slowed sharply over the weekend and Iran has not agreed to resume talks with Washington. Separately, Tehran said it was close to an understanding with Oman on a transit route, but the U.S. is not part of those talks and continues to insist on unrestricted passage. Brent crude rose above $90 a barrel and WTI traded near $84.60 as the standoff kept supply-risk premium in the market. For gold, the impact remains two-sided: shipping risk and a softer dollar support defensive demand, while higher crude keeps inflation pressure alive and prevents a clean decline in Treasury yields.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $84.58 a barrel, while Brent crude was near $90.87. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area. The U.S. dollar index is softer. (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.)
Technically, spot gold bulls' next upside price objective is to push prices back above the $4,447.66 resistance level, with a sustained move targeting $4,533.68 and then $4,571.83. Bears' next near-term downside price objective is a break below $4,326.22, with deeper downside targets at $4,275.62 and then $4,189.60. First resistance is seen at $4,447.66 and then at $4,533.68. First support is seen at $4,326.22 and then at $4,275.62.
Spot silver bulls' next upside price objective is to drive prices back above $67.0587, with a move above that level targeting $68.0847 and then $69.5353. The next downside price objective for the bears is a break below $65.4313, with deeper downside targets at $64.6422 and then $62.0394. First resistance is seen at $67.0587 and then at $68.0847. Next support is seen at $65.4313 and then at $64.6422.
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