(Kitco NewsWire) - Spot gold and silver prices are higher in early U.S. trading Monday, with a softer U.S. dollar and reduced Federal Reserve rate-hike expectations keeping a bid under precious metals despite stronger regional manufacturing data. At the time of writing, spot gold was trading near $4,394.70 an ounce, up 0.44%, while spot silver was trading at $65.430, up 1.32% on the session.
The latest positioning still favors a September Fed hold, but this morning’s Empire State survey added a firmer activity and price-pressure signal to an otherwise softer data run. The New York Fed’s general business conditions index rose 5 points to 20.6 in August, its highest reading in more than 4 years, while new orders printed at 17.3, shipments at 11.7 and prices paid rose 6 points to 58.6. That strength follows last week’s weaker July retail sales, softer CPI, flat headline PPI and weaker consumer sentiment, leaving markets with roughly a 30% to 31% probability of a September rate hike. The next rates catalysts are the Fed’s July meeting minutes Wednesday at 2 p.m. ET, housing data and Friday’s flash PMI readings.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. Iran said it is close to finalizing an understanding with Oman on a transit route through the strait, but the U.S. is not part of those talks and continues to demand unrestricted passage. At the same time, the 60-day deadline for a broader U.S.-Iran peace deal is expiring with no compromise in place, while tanker traffic through Hormuz slowed sharply over the weekend. Oil is firmer as the market prices a renewed supply-risk premium, with Brent trading near $89 a barrel and WTI near $83. For gold, the setup remains two-sided: weaker Fed-hike pricing and a softer dollar support the metal, while any further oil spike would keep inflation risk alive and limit the rally through the yields channel.
Global markets were mixed ahead of the U.S. open. U.S. stock-index futures were uneven, with S&P 500 futures slightly higher, Nasdaq futures outperforming and Dow futures lower. In Asia, Japan’s Nikkei rose 0.7% and China’s Shanghai Composite gained 1.4%. European trading was modestly firmer, with the STOXX 600 and FTSE 100 both slightly higher.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $82.95 a barrel, while Brent crude was near $89.44. 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 $4,448.00 resistance level, with a sustained move targeting $4,518.00 and then $4,596.00. Bears' next near-term downside price objective is a break below $4,333.00, with deeper downside targets at $4,262.00 and then $4,205.00. First resistance is seen at $4,448.00 and then at $4,518.00. First support is seen at $4,333.00 and then at $4,262.00.
Spot silver bulls' next upside price objective is to drive prices back above $66.78, with a move above that level targeting $68.24 and then $69.63. The next downside price objective for the bears is a break below $65.15, with deeper downside targets at $63.57 and then $62.20. First resistance is seen at $66.78 and then at $68.24. Next support is seen at $65.15 and then at $63.57.
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