(Kitco NewsWire) - Spot gold prices are slightly lower and spot silver prices are modestly higher in late-afternoon U.S. trading Monday, as renewed U.S.-Iran military escalation lifted oil prices, pushed long-end Treasury yields higher and kept pressure on non-yielding metals after Friday’s hawkish Fed shock. At the time of writing, spot gold was trading near $4,446.50 an ounce, down 0.18%, while spot silver was trading at $66.360, up 0.16% on the session.
North American equity markets closed lower as oil and yields rose. The S&P 500 fell 25.62 points, or 0.3%, to 7,686.14, the Dow Jones Industrial Average dropped 374.09 points, or 0.7%, to 53,185.90, the Nasdaq Composite slipped 31.53 points, or 0.1%, to 26,370.89 and the Russell 2000 fell 15.92 points, or 0.5%, to 2,956.45. European markets also finished lower, with the STOXX Europe 600 down 0.62% to 651.10. Germany’s DAX fell 1.17% to 26,258.11, France’s CAC 40 lost 0.79% to 8,334.50 and Italy’s FTSE MIB slipped 0.01% to 52,612.69. London was closed for a bank holiday.
The latest positioning remains driven by the post-Jackson Hole rate repricing and the week’s labor-market calendar. Fed-funds futures priced a 66.1% probability of a September rate hike, up from 57% Friday, as traders treated Chair Kevin Warsh’s hawkish speech and Monday’s oil shock as reinforcing the Fed’s inflation problem. The two-year Treasury yield held near 4.34%, while the 10-year yield rose to 4.75% and the 30-year yield remained near the 5.25% area. The next catalysts are Tuesday’s JOLTS job openings and ISM manufacturing data, Wednesday’s ADP employment report and Beige Book, Thursday’s jobless claims and ISM services data, and Friday’s August nonfarm payrolls report. For gold, the setup remains defensive: a stronger rate-hike impulse and elevated yields cap rallies, but geopolitical stress and fiscal-risk demand have so far limited downside follow-through below Friday’s low.
Precious metals stabilized late in the session but did not repair the technical damage from Friday. Gold held above the $4,395.80 session low and recovered toward the $4,452 to $4,487 resistance band, but it remains below its short-term moving averages and below the 61.8% Fibonacci level cited in the latest technical work. Silver rebounded from $65.51 and briefly traded as high as $67.60, but it remains below the $66.87 short-term 50% level and well below Friday’s $71.18 reversal top. The late bounce suggests buyers are still present on dips, but the rate and oil mix has left sellers with near-term momentum.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. U.S. forces struck Iranian rocket launchers near the strait over the weekend, the first U.S. military action in about a month, and Iran responded with missile attacks on U.S. facilities in Jordan. Oil rose sharply as the market repriced supply risk through a waterway that handles roughly 20% of global oil trade. Brent crude closed back above $90 a barrel, while U.S. crude traded in the mid-$80s. For gold, the impact remains conflicted: Gulf escalation supports safe-haven demand, but higher oil increases inflation risk, raises the probability of another Fed hike and keeps Treasury yields elevated.
The key outside markets see Nymex WTI crude oil prices firmer and trading in the mid-$80s a barrel, while Brent crude was above $90. The yield on the benchmark 10-year U.S. Treasury note is trading near 4.75%. The U.S. dollar index is firmer. (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 $4,487.00 resistance level, with a sustained move targeting $4,515.00 and then $4,543.00. Bears' next near-term downside price objective is a break below $4,396.00, with deeper downside targets at $4,341.00 and then $4,319.60. First resistance is seen at $4,452.00 and then at $4,487.00. First support is seen at $4,396.00 and then at $4,341.00.
Spot silver bulls' next upside price objective is to drive prices back above $66.87, with a move above that level targeting $67.47 and then $68.16. The next downside price objective for the bears is a break below $65.67, with deeper downside targets at $62.98 and then $62.45. First resistance is seen at $66.87 and then at $67.47. Next support is seen at $65.67 and then at $62.98.
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