(Kitco NewsWire) - Spot gold and silver prices are higher in early U.S. trading Wednesday, as softer crude oil prices and a modest easing in Treasury-yield pressure helped precious metals recover ahead of the Federal Reserve’s rate decision. At the time of writing, spot gold was trading near $4,342.50 an ounce, up 1.16%, while spot silver was trading at $64.58, up 1.62% on the session.
The latest positioning remains centered on the Fed’s 2 p.m. ET policy decision, Chair Kevin Warsh’s press conference and the updated rate projections. August retail sales rose 1.2%, above expectations for a 0.7% gain, while the control group rose 1.4%, keeping the consumer side of the economy firmer than expected. The data reinforce the case for a 25-basis-point hike today, but that move is already largely priced, with markets showing roughly 90% to 93% odds of an increase. The more important risk for gold is the path beyond today. A one-and-done hike would ease some real-yield pressure, while a signal that additional hikes are likely would keep the 10-year Treasury yield near the 5% area and cap rallies in non-yielding metals. The NAHB housing market index at 10 a.m. ET is the remaining data point before the Fed announcement.
Gold and silver are trading better because oil and yields have stopped rising for now, not because the rate risk has disappeared. Gold has rebounded from the $4,283 support zone and is pressing toward the $4,354 resistance level, while silver has reclaimed the $64.40 area and is testing the next upside band near $65.28. The metals complex remains exposed to Warsh’s tone. If the Fed frames today’s expected hike as a limited response to oil-driven inflation, gold and silver can extend the relief move. If the updated projections imply a broader tightening cycle, the dollar and yields will likely regain control.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. Oil prices eased for the first time this week after a reported 7.1 million-barrel build in U.S. crude inventories, but the broader supply risk remains unresolved. Saudi Arabia’s key East-West Pipeline is still offline, Yemen’s Iran-backed Houthi rebels continue to target infrastructure and shipping, and Iran is still targeting vessels in the Strait of Hormuz. Brent crude is trading near $107.60 a barrel and WTI near $103.70, still far above prewar levels. For gold, the setup remains conflicted: lower oil on the day reduces immediate inflation pressure, but persistent Gulf shipping risk keeps a defensive bid in the background.
Global markets were firmer ahead of the U.S. open. S&P 500 futures rose 0.2%, Dow futures gained 0.1% and Nasdaq futures added 0.4% as traders positioned for the Fed decision. European markets were also higher, with the FTSE 100 up 0.6%, France’s CAC 40 up 0.4% and Germany’s DAX up 0.3%. Asian markets finished mostly higher.
The key outside markets see Nymex WTI crude oil prices lower and trading around $103.70 a barrel, while Brent crude was near $107.60. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5% area. The U.S. dollar index is mixed to 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 $4,354.00 resistance level, with a sustained move targeting $4,403.00 and then $4,433.00. Bears' next near-term downside price objective is a break below $4,316.00, with deeper downside targets at $4,283.00 and then $4,256.00. First resistance is seen at $4,354.00 and then at $4,403.00. First support is seen at $4,316.00 and then at $4,283.00.
Spot silver bulls' next upside price objective is to drive prices back above $65.28, with a move above that level targeting $65.98 and then $66.74. The next downside price objective for the bears is a break below $64.40, with deeper downside targets at $63.45 and then $62.57. First resistance is seen at $65.28 and then at $65.98. Next support is seen at $64.40 and then at $63.45.
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