(Kitco NewsWire) - Spot gold and silver prices are lower in early U.S. trading Tuesday, as a stronger oil-risk premium and higher long-end Treasury yields offset fading expectations for a September Federal Reserve rate hike. At the time of writing, spot gold was trading near $4,390.40 an ounce, down 0.58%, while spot silver was trading at $64.890, down 1.17% on the session.
The latest positioning remains split between weaker U.S. growth data and renewed inflation pressure from energy. Last week’s soft retail-sales, CPI, PPI and consumer-sentiment sequence reduced the market-implied probability of a September Fed rate hike to about 30% to 35%, but long-end yields are rising as traders reprice oil-driven inflation and fiscal-risk premium. The 10-year Treasury yield is trading near 4.74%, while the 30-year yield has reached the 5.2% to 5.3% area, its highest level since 2007. Nohshad Shah, head of EMEA fixed-income sales at Citadel Securities, said inflation has “little to no breathing room” in a supply-shock environment. The next macro catalysts are July housing starts and building permits at 8:30 a.m. ET, the Fed’s July meeting minutes Wednesday at 2 p.m. ET, jobless claims and the Philadelphia Fed survey Thursday at 8:30 a.m. ET and flash PMI readings Friday at 9:45 a.m. ET.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. A ship transiting the strait was struck by a projectile off Oman, damaging its engine room and causing a crew casualty, while the 60-day U.S.-Iran negotiation window has expired without progress. Iran continues to insist the strait will remain closed until U.S. sanctions and other conditions are addressed, while talks with Oman on strait management are still moving separately from Washington. Brent crude is trading near $91 a barrel and WTI near $85, keeping energy inflation risk in the market. For gold, the setup remains two-sided: shipping-risk headlines support defensive demand, while higher crude and rising long yields limit the rate-relief bid.
Global markets were weaker ahead of the U.S. open. U.S. stock-index futures edged lower, with pressure heaviest in technology shares after sharp pre-market declines in AI-linked stocks. In Europe, France’s CAC 40 and Germany’s DAX each fell 0.5%, while the FTSE 100 was nearly flat. In Asia, Japan’s Nikkei 225 fell 2.5% and South Korea’s Kospi lost 1.6%, while Hong Kong and Shanghai posted modest gains.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $84.99 a barrel, while Brent crude was near $90.94. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area. The U.S. dollar index is mixed to slightly firmer after recent weakness. (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 $65.00, 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 $65.00 and then at $63.57.
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