(Kitco NewsWire) - Spot gold and silver prices were higher in early U.S. trading Tuesday, as both metals stabilized after Monday’s steep selloff while elevated oil prices, Treasury yields and Fed rate-hike expectations continued to cap the rebound. At the time of writing, spot gold was trading near $4,157.80 an ounce, up 1.06% on the session, while spot silver was trading near $60.770, up 0.40%.
Market positioning remains tight around the U.S. rates path after Monday’s bond selloff pushed benchmark yields back to pre-financial-crisis levels. Traders are pricing roughly a 70% chance of another Fed rate increase in October, while the 10-year Treasury yield is trading near the 5.25% area and the U.S. dollar index is holding near a two-month high. Tuesday’s August JOLTS job openings report at 10:00 a.m. ET is the first labor-market test of the week, followed by August personal income and PCE inflation Wednesday at 8:30 a.m. ET, ISM manufacturing Thursday at 10:00 a.m. ET and the September employment report Friday at 8:30 a.m. ET. Stronger labor or inflation data would keep the rates channel pointed against gold, while softer prints would test whether Monday’s break below $4,200 has already priced enough tightening risk.
The Strait of Hormuz and U.S.-Iran situation remains the main geopolitical input into oil, inflation and the gold trade. Crude prices rose for a second session as lingering supply-disruption risk outweighed evidence that Middle East exports are recovering through workarounds, including ship-to-ship transfers and increased Saudi and UAE shipments. Brent crude traded near $106.77 a barrel and WTI near $93.94 in early trade, with regional exports rising to 12.8 million barrels per day in September but still facing higher logistics costs and uncertainty around the strait. The transmission to bullion is still split: war risk supports safe-haven demand, but oil-led inflation risk is lifting yields and Fed expectations, raising the opportunity cost of holding non-yielding metals.
Global risk tone was cautious but steadier before the U.S. open. U.S. stock-index futures edged higher as technology shares found support after Monday’s selloff, with Dow e-minis up 52 points, S&P 500 e-minis up 9 points and Nasdaq 100 e-minis up 72 points at 7:20 a.m. ET. Oil and yields kept risk appetite contained, while chip-related shares recovered modestly and investors looked ahead to Fed speakers, U.S. labor data and inflation prints.
The key outside markets see Nymex WTI crude oil prices higher and trading near $93.94 a barrel, while Brent crude was near $106.77. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.25% area. The U.S. dollar index is holding near a two-month high. (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 $4,190.00 to $4,214.00 resistance zone, with a sustained move targeting $4,238.00 and then $4,254.44. Bears’ next near-term downside price objective is a break below $4,112.00, with deeper downside targets at $4,073.00 and then $4,030.00. First resistance is seen at $4,190.00 and then at $4,214.00. First support is seen at $4,112.00 and then at $4,073.00.
Spot silver bulls’ next upside price objective is to drive prices back above the $61.450 to $62.180 area, with a move above that zone targeting $63.150 and then $64.080. The next downside price objective for the bears is a break below $60.310, with deeper downside targets at $59.520 and then $58.770. First resistance is seen at $61.450 and then at $62.180. Next support is seen at $60.310 and then at $59.520.
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