(Kitco NewsWire) - Spot gold and silver prices are higher in late-afternoon U.S. trading Friday, as a pullback in crude oil and a softer U.S. dollar helped precious metals recover from Thursday’s inflation-driven selloff, even as markets priced a higher probability of a Federal Reserve rate hike next week. At the time of writing, spot gold was trading near $4,347.10 an ounce, up 0.73%, while spot silver was trading at $64.260, up 1.28% on the session.
North American equity markets closed higher as oil retreated and the August CPI report came in close enough to expectations to calm risk appetite. The S&P 500 rose 65.28 points, or 0.9%, to 7,656.98, the Dow Jones Industrial Average gained 509.19 points, or 1.0%, to 52,573.29, the Nasdaq Composite added 251.31 points, or 1.0%, to 26,333.04, and the Russell 2000 rose 13.00 points, or 0.4%, to 2,903.94. European markets also finished higher, with the STOXX Europe 600 up 0.49% to 639.10. London’s FTSE 100 rose 0.39% to 10,650.44, Germany’s DAX gained 0.82% to 25,568.56, France’s CAC 40 added 0.78% to 8,179.77, and Italy’s FTSE MIB climbed 1.36% to 52,512.03.
The latest positioning remains hawkish, but less disorderly than Thursday’s oil-and-yield shock. August CPI matched expectations at the headline level, while core CPI was firm enough to push Fed-hike odds higher, with derivatives markets pricing roughly an 85% to 90% probability of a 25-basis-point hike next week. The 10-year Treasury yield briefly touched 4.9915% after the inflation data before settling near 4.95%, while the 30-year yield hit a fresh 19-year high above 5.42% before easing. The dollar gave back part of its CPI-driven gain, and Brent crude fell about 3% after briefly reaching a four-month high near $110. For gold, the signal is mixed: the rate market still points to a hike at the Sept. 15-16 meeting, but the pullback in oil, yields and the dollar allowed bullion to defend support.
Precious metals stabilized because the worst-case inflation impulse was not extended through the close. Gold held the $4,319.60 to $4,230.51 retracement zone identified in the latest technical work and remained above its $4,269.02 50-day moving average, while silver defended the $62.00 to $62.50 support zone after Thursday’s 5%-plus drop. The recovery is still tactical, not a confirmed trend reversal. Bulls need gold to clear the $4,396.78 to $4,489.87 resistance band and silver to reclaim the $65.60 to $68.17 area before the rebound becomes technically durable.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand, but Friday’s market impact came through a partial easing of the energy spike. Oil flows remained restricted as the U.S. and Iran continued to trade attacks, but crude fell after reports that regional foreign ministers were trying to work out a temporary shipping arrangement through the waterway. Brent crude was still on pace for a weekly gain of more than 8%, and the conflict remains a live inflation risk. For gold, the setup remains conflicted: any progress toward managed shipping reduces the immediate haven impulse, while a prolonged disruption would keep oil elevated, support inflation expectations and preserve Fed-hike pressure.
The key outside markets see Nymex WTI crude oil prices lower but still trading above $100 a barrel, while Brent crude was near $104. The yield on the benchmark 10-year U.S. Treasury note is trading near 4.95%. 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 $4,396.78 resistance level, with a sustained move targeting $4,489.87 and then $4,538.38. Bears' next near-term downside price objective is a break below $4,319.60, with deeper downside targets at $4,269.02 and then $4,230.51. First resistance is seen at $4,396.78 and then at $4,489.87. First support is seen at $4,319.60 and then at $4,269.02.
Spot silver bulls’ next upside price objective is to drive prices back above $65.60, with a move above that level targeting $68.17 and then $72.00. The next downside price objective for the bears is a break below $62.50, with deeper downside targets at $62.00 and then $60.00. First resistance is seen at $65.60 and then at $68.17. Next support is seen at $62.50 and then at $62.00.
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