(Kitco NewsWire) - Spot gold and silver prices were lower after the close Monday as a firmer U.S. dollar, renewed oil strength and elevated Treasury-yield risk offset safe-haven demand tied to the Strait of Hormuz and the U.S.-Iran conflict. At the time of writing, spot gold was trading near $4,168.90 an ounce, down 0.59%, while spot silver was trading at $60.120, down 0.96% on the session.
The latest price action is less about an immediate October Fed move and more about whether this week’s inflation data revives the December tightening path. Markets were pricing roughly a 17% chance of an October hike and an 87.7% probability of at least one hike by December after softer recent U.S. data lowered near-term hike risk but oil-driven inflation concerns kept year-end policy risk alive. September CPI is due Wednesday, followed by PPI and retail sales Thursday.
This setup has left gold exposed to the dollar and real-yield channel, even as ETF demand and central-bank buying remain supportive beneath the market.
The Strait of Hormuz remains the core geopolitical risk premium in energy and metals. Iran’s security chief, Mohsen Rezaei, said the latest U.S. response to Tehran’s seven conditions for reopening the waterway was insufficient, with no talks until those conditions are met. The current market impact has been clear: Brent settled up 1.8% at $106.65 a barrel and WTI gained 2.1% to $93.74, while gold failed to hold its earlier one-week high as higher energy prices fed inflation and Fed-risk concerns.
North American equities closed mixed. The S&P 500 slipped 4.30 points, or 0.1%, to 7,807.24, the Dow Jones Industrial Average rose 195.60 points, or 0.4%, to 51,850.55 and the Nasdaq Composite fell 120.27 points, or 0.4%, to 27,245.90. The Russell 2000 fell 12.50 points, or 0.4%, to 2,794.48. In Europe, the STOXX Europe 600 rose 0.65% to 635.65, Germany’s DAX gained 0.76% to 25,277.68, France’s CAC 40 rose 0.38% to 7,832.88, the U.K.’s FTSE 100 climbed 0.99% to 10,656.28 and Italy’s FTSE MIB added 0.58% to 50,035.00. Spain’s IBEX 35 led the region, up 1.33%.
The key outside markets see Nymex WTI crude oil prices higher and trading around $93.74 a barrel, while Brent crude was near $106.65. The U.S. dollar index was firmer. The yield on the benchmark 10-year U.S. Treasury note was last at 5.24% before the Monday cash-bond holiday, holding well above 5% and keeping pressure on non-yielding assets.
The Treasury move is now a gold-market issue and a sovereign-risk issue. The 10-year yield at 5.24%, with the 20-year at 5.65% and the 30-year at 5.60% on Friday’s Treasury curve, signals that duration investors are demanding more compensation for inflation risk, supply risk and fiscal risk. The market implication is that U.S. debt issuance, not only Fed policy, is now part of the real-rate headwind for gold. However, according to analysts, if investors start treating the fiscal path as a debasement risk rather than only a yield-supporting story, the same debt concern could eventually become more supportive for bullion.
Trade Nation Senior Market Analyst David Morrison said gold may still need to retest “major support around $4,000” before momentum fully resets, adding that “neither side looks willing to throw in its hand at current levels.”
Fawad Razaqzada, market analyst at FOREX.com, kept a cautious near-term gold view in his latest note, saying the metal’s rebound “has lost some momentum” as the dollar and yields remain elevated.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,220.89 to $4,226.82 resistance zone, with a sustained move targeting $4,271.57 and then $4,311.17. Bears’ next near-term downside price objective is a break below $4,175.03, with deeper downside targets at $4,154.99 and then $4,141.86. First resistance is seen at $4,220.89 and then at $4,226.82. First support is seen at $4,175.03 and then at $4,154.99.
Spot silver bulls’ next upside price objective is to drive prices back above the $61.501 to $61.72 area, with a move above that zone targeting $63.06 and then $65.09. The next downside price objective for the bears is a break below $59.96, with deeper downside targets at $58.74 and then $57.64. First resistance is seen at $61.501 and then at $61.72. Next support is seen at $59.96 and then at $59.824.
See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
