(Kitco NewsWire) - Spot gold and silver prices are lower in early U.S. trading Monday, as a firmer U.S. dollar and easing oil-risk premium offset support from softer U.S. labor data and lingering Middle East risk. At the time of writing, spot gold was trading near $4,139.80 an ounce, down 0.82%, while spot silver was trading at $61.660, down 0.98% on the session.
The market is still trading in the aftermath of last month’s FOMC meeting, where policymakers voted to hold the federal funds target range at 3.50% to 3.75%. The statement kept an inflation-first bias, noting that inflation remained above the 2% target and that energy-related supply shocks were still feeding prices. Since then, the June payrolls miss has pulled down near-term hike expectations: the July hike probability fell to roughly 22% from 31.5% before the jobs report, while September odds also eased. The dollar recovered modestly on Monday after recent losses, with DXY around 101.035, but the broader repricing remains unresolved ahead of Wednesday’s 2 p.m. ET FOMC minutes.
The labor data gave metals a floor but not enough momentum to extend last week’s rebound. Nonfarm payrolls rose by 57,000 in June, the unemployment rate fell to 4.2% and the labor force shrank by 720,000, softening the case for an immediate Fed hike without removing the inflation constraint. Rhona O’Connell, head of market analysis, EMEA and Asia at StoneX, characterized the U.S. labor market as “a mixed bag,” noting that a softer payroll headline, lower unemployment and small-business hiring constraints left rates markets taking a more cautious view on additional U.S. tightening. O’Connell noted that swaps were pricing a 34% chance of a Q4 hike.
The Conflict in the Middle East and the ongoing uncertainty in the Strait of Hormuz has shifted from acute shock to managed risk, but not to normal. Oil prices slipped Monday after OPEC+ said seven members would raise output by 188,000 barrels per day in August, while shipping activity through Hormuz continued to recover. Brent was near $71.72 a barrel and WTI near $68.40 in early trade, well below wartime stress levels. Still, the risk premium has not disappeared: talks with Iran are on hold during funeral ceremonies for Ayatollah Ali Khamenei, several vessels reportedly turned around over the weekend and O’Connell noted that some tankers were moving through the strait while harassment and mine-risk warnings persisted. For gold, that leaves a background safe-haven bid but not a dominant driver; for oil, the immediate balance has shifted toward supply normalization unless transit disruptions re-intensify.
Global markets were mixed after the U.S. holiday weekend. S&P 500 futures rose 0.5% and Dow futures gained 0.1%, while European shares were modestly firmer and Asian markets were mixed. The U.S. dollar strengthened to 162.29 yen and the euro eased to $1.1419. The yield on the benchmark 10-year U.S. Treasury note was trading near the 4.5% area after slipping in Asian trade, while the key outside markets saw WTI crude around $68.40 a barrel and Brent near $71.72.
Traders are watching the S&P Global U.S. Services PMI at 9:45 a.m. ET, ISM Services PMI at 10 a.m. ET, global services PMI at 11 a.m. ET and Fed Governor Christopher Waller’s 11 a.m. ET remarks in Rome. The larger rate event is Wednesday’s FOMC minutes at 2 p.m. ET, which will be read against the June payroll miss and the Fed’s still-hawkish inflation language.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,257.63 52-week moving average, with a sustained move targeting $4,416.82 and then $4,481.78. Bears’ next near-term downside price objective is a break below $4,069.54, with deeper downside targets at $3,942.10 and then $3,886.46. First resistance is seen at $4,203.30 and then at $4,257.63. First support is seen at $4,130.70 and then at $4,069.54.
Spot silver bulls’ next upside price objective is to drive prices back above the $63.47 52-week moving average, with a move above that zone targeting $89.38 and then the broader swing-chart reversal area. The next downside price objective for the bears is a break below $60.83, with deeper downside targets at $55.60 and then $45.55. First resistance is seen at $63.40 and then at $63.47. Next support is seen at $61.35 and then at $60.83.
