Gold and Silver Prices Rise Amid Market Shifts

Gold and silver spot prices experienced an uptick in late afternoon trading on Thursday in the U.S. This shift followed a retreat in oil prices, a decline in U.S. Treasury yields, and a weakening of the U.S. dollar after Wednesday’s Federal Reserve meeting. As of the latest update, spot gold was priced around $4,120.80 per ounce, up 1.13%, while spot silver was trading at about $59.95, surging 2.82% during the session.

Gold’s trading range for the day was between $4,053.60 and $4,134.90. It managed to rise above the $4,100 mark, yet remained under the resistance zone of $4,162 to $4,214. Silver’s range fluctuated from $57.47 to $60.62, recovering back above $60.00, but still lagging behind the $61.00 to $62.00 resistance area.

The market remains somewhat uncertain, especially following last Thursday’s jobs report and the Fed’s meeting minutes. In June, payrolls climbed by 57,000, while the unemployment rate stayed steady at 4.2%. Notably, payrolls for April and May were revised downward by a total of 74,000, initially bolstering gold prices due to decreased confidence in the Fed’s potential rate hikes. However, minutes from the Fed indicated that several officials were still quite concerned about inflation, suggesting rates might stay elevated in September. Meanwhile, the latest jobless claims indicated a cooling labor market, attributed more to slowing hiring than increased layoffs.

The yield on the 10-year Treasury note dropped to around 4.53%, following a rise to a seven-week high of near 4.60% on Wednesday. The two-year Treasury yield was around 4.16%, and the DXY index fell below 101.00. These movements provided metals some breathing space, but interest rate paths remain somewhat constrained ahead of next week’s Consumer Price Index (CPI) report.

In the Strait of Hormuz, the situation seems to be characterized by open traffic, albeit with elevated military and shipping risks instead of confirmed chokepoint closures. Despite ongoing U.S. attacks on Iranian targets and Iran’s retaliation in the region, there has not been a naval blockade, and reports of Iranian tankers moving crude oil through the strait have contributed to declining oil risk premiums. As a result, Brent crude oil prices fell below $76 a barrel, while WTI was trading near $71 a barrel, as traders considered a lower likelihood of immediate supply disruptions.

This shift in focus supported gold prices, as the drop in oil prices diminished inflationary pressures that had been pushing yields and the dollar upward. In the wider market, trading dynamics transformed from oil sales and troubled bonds to those of lower yields, a softer dollar, and stronger precious metals.

Market observers are attentive to next week’s CPI data, Federal Reserve Chairman Kevin Warsh’s congressional testimony, and any further disruptions to the Hormuz route. Slower CPI growth could lessen the probability of a September rate hike and clear the way for gold to test the $4,162-$4,214 resistance zone. On the flip side, a new spike in oil prices might refocus attention on inflationary channels.

In major external markets, Nymex WTI crude oil prices are around $71.00 per barrel, while Brent crude hovers around $75.50. The value of the U.S. dollar index has dropped to approximately 100.80, and the benchmark 10-year U.S. Treasury yield is around 4.53%.

From a technical analysis standpoint, gold bulls aim to push spot prices back above the resistance zone of $4,162.36 to $4,214.34, eyeing a sustained move toward a 50-day moving average of $4,362.63. Conversely, the bears are targeting a drop below $4,041.65, with deeper objectives set at $3,942.10 and $3,886.46. Initial resistance appears at $4,162.36, followed by $4,214.34, while first support is at $4,072.40 and then $4,041.65.

For silver, the next upside target for bulls is to lift prices above $59.44, then $63.28, with further gains directed at a 200-day moving average of $70.06 and a 50-day moving average of $70.53. Bearish traders are focused on dropping prices below $58.53, with further downside targets at $55.60 and $50.00. Primary resistance levels are at $59.44, followed by $63.28, while support levels are at $58.53, and then $55.60.