(Kitco NewsWire) - Spot gold and silver prices are higher ahead of the North American market open Friday, as a softer U.S. dollar gave metals room to rebound while traders balanced sticky inflation, Federal Reserve rate-hike risk and a less acute Strait of Hormuz shock. At the time of writing, spot gold was trading near $4,046.20 an ounce, up 0.50%, while spot silver was trading near $58.240, up 0.84% on the session.
Thursday’s U.S. inflation update kept the Fed constraint in place before the cash equity open. May PCE inflation rose 4.1% from a year earlier, while personal income and consumer spending both rose 0.7% on the month. The data reinforced the view that easing is not the base case for the July 28-29 FOMC meeting, even as lower oil prices have reduced the immediate inflation impulse from the Middle East shock.
The June 17 Federal Reserve meeting remains the main positioning anchor for precious metals. Since the meeting, the cross-asset reaction has been a dollar-and-rates repricing rather than a sustained safe-haven bid: DXY was lower near 101.22 at 8:39 a.m. ET but remained close to its 52-week high of 101.80, while the 10-year Treasury yield was near the 4.4% area.
The Strait of Hormuz situation has shifted from closure shock to managed transit risk. Vessel traffic through the strait doubled over the prior 24 hours Thursday to the highest level since late February, and ships were again transiting with satellite signals switched on, helping push Brent crude back toward prewar levels. The risk has not disappeared: a Singapore-flagged commercial vessel was struck near the Oman coast Thursday evening, and a U.S. official said an Iranian drone hit the ship. The current market impact is narrower than last week’s panic premium, with oil lower, the dollar softer and gold carrying an insurance bid rather than a full geopolitical squeeze.
The key outside markets see Nymex WTI crude oil prices lower and trading around $69.67 a barrel, while Brent crude was near $73.05. The U.S. dollar index is lower. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.4% area.
Technically, spot gold bulls' next upside price objective is to push prices back above the $4,023.00 to $4,045.00 resistance zone, with a sustained move targeting $4,122.00 and then $4,170.85. Bears' next near-term downside price objective is a break below $3,959.08, with deeper downside targets at $3,886.46 and then $3,850.00. First resistance is seen at $4,045.00 and then at $4,122.00. First support is seen at $3,959.08 and then at $3,886.46.
Spot silver bulls' next upside price objective is to drive prices back above the $58.77 to $61.55 area, with a move above that zone targeting $62.00 and then $72.00. The next downside price objective for the bears is a break below $55.40, with deeper downside targets at $51.64 and then $48.97. First resistance is seen at $58.77 and then at $61.55. Next support is seen at $55.40 and then at $51.64.
