(Kitco NewsWire) - Spot gold and silver prices are higher in early U.S. trading Wednesday, as escalating U.S.-Iran strikes, Brent crude above $100 a barrel and a softer dollar supported defensive demand ahead of the week’s U.S. inflation reports. At the time of writing, spot gold was trading near $4,403.10 an ounce, up 1.11%, while spot silver was trading at $66.080, up 0.68% on the session.
The latest positioning remains caught between geopolitical demand and a still-hawkish Fed setup. Markets are pricing about a 60% probability of a 25-basis-point rate hike at the Fed’s Sept. 15-16 meeting, while the 10-year Treasury yield is trading near 4.81%, its highest level since October 2023. The Producer Price Index is due Thursday and the Consumer Price Index is due Friday, with both releases now carrying more weight because the oil shock has revived inflation concerns. For gold, the balance is conflicted but constructive in the short term: higher crude and elevated yields raise the opportunity cost of holding bullion, but safe-haven flows, a softer dollar and concern over Gulf supply routes are offsetting the rate headwind.
Gold and silver are rebounding, but neither metal has cleared the technical ceiling that would confirm a full trend repair. Gold has recovered from the $4,347 support area and is testing toward the $4,422 resistance level, while silver remains compressed below $67.21 after holding above the $64.73 support level. The price action suggests buyers are using geopolitical risk to defend dips, but the inflation data will decide whether the move extends or stalls under the Fed-rate channel.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. The U.S. military said it destroyed five Iranian oil tankers Tuesday after Iranian attacks on U.S. warships, while Tehran struck back at U.S. targets in Jordan. Both Washington and Tehran are trying to exert control over the strait, where about one-fifth of the world’s oil moved before the war began, and the latest attacks pushed Brent crude to $100.72 and WTI to $95.25 in early trading. For gold, the impact remains two-sided: Hormuz risk supports safe-haven demand, but higher energy prices lift inflation expectations, keep Treasury yields elevated and preserve the Fed-hike risk into next week’s meeting.
Global markets were mixed to weaker ahead of the U.S. open. U.S. stock-index futures slipped as oil climbed above $100 and Treasury yields held near three-year highs. The bond move kept pressure on rate-sensitive equities, while energy shares retained relative support. In Europe and Asia, the same oil-and-yield mix weighed on risk appetite as traders awaited U.S. inflation data.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $95.25 a barrel, while Brent crude was near $100.72. The yield on the benchmark 10-year U.S. Treasury note is trading near 4.81%. 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 $4,422.00 resistance level, with a sustained move targeting $4,465.00 and then $4,512.00. Bears' next near-term downside price objective is a break below $4,347.00, with deeper downside targets at $4,290.00 and then $4,263.00. First resistance is seen at $4,422.00 and then at $4,465.00. First support is seen at $4,347.00 and then at $4,290.00.
Spot silver bulls' next upside price objective is to drive prices back above $67.21, with a move above that level targeting $68.74 and then $70.76. The next downside price objective for the bears is a break below $64.73, with deeper downside targets at $62.57. First resistance is seen at $67.21 and then at $68.74. Next support is seen at $64.73 and then at $62.57.
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