(Kitco NewsWire) - Spot gold and silver prices are higher in late-afternoon U.S. trading Wednesday, after a cooler July CPI report cut September Federal Reserve rate-hike expectations and helped Treasury yields ease. At the time of writing, spot gold was trading near $4,406.20 an ounce, up 0.90%, while spot silver was trading at $65.140, up 0.89% on the session.
North American equity markets finished mostly higher. The S&P 500 rose 20.30 points, or 0.3%, to 7,748.50, while the Nasdaq Composite gained 143.04 points, or 0.5%, to 26,588.49. The Dow Jones Industrial Average slipped 21.58 points, or less than 0.1%, to 53,770.27, and the Russell 2000 rose 18.37 points, or 0.6%, to 3,045.48. In Europe, the CAC 40 lost 0.46% to 8,674.94, the DAX fell 0.17% to 26,346, the FTSE 100 eased 0.10% to 10,833 and the Euro Stoxx 50 fell 0.24% to 6,535.
The latest positioning shifted in favor of a Fed hold after the CPI release, but the move was not a clean dovish reset. Headline CPI rose 0.1% in July and 3.4% from a year earlier, while core CPI rose 0.2% on the month and 2.5% year-over-year. September hike odds fell to around 40% from roughly 48% on Tuesday, while the 10-year Treasury yield settled near 4.68% and the two-year yield slipped toward 4.20%. The data supported equities and gold, but energy-linked inflation risk remains the market’s main objection to fully pricing out another hike this year.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. U.S.-Iran talks have not produced a reopening deal, Iran’s top security official has tied the strait’s reopening to U.S. conditions including frozen assets and regional conflicts, and shipping through Hormuz and Bab el-Mandeb remains constrained. The International Energy Agency warned that available inventory buffers are rapidly depleting and lowered supply estimates for the rest of the year. For gold, the setup remains two-sided: lower yields support non-yielding metals, while persistent Gulf shipping risk keeps oil prices high enough to complicate the Fed-rate relief trade.
The key outside markets see Nymex WTI crude oil prices trading around $83.20 a barrel, while Brent crude was near $88.92. The U.S. dollar index was firmer late in the session after reversing its post-CPI decline. (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.) The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area.
Technically, spot gold bulls' next upside price objective is to push prices back above the $4,430.00 to $4,492.00 resistance zone, with a sustained move targeting $4,500.00 and then $4,598.48. Bears' next near-term downside price objective is a break below $4,360.00, with deeper downside targets at $4,299.00 and then $4,224.00. First resistance is seen at $4,430.00 and then at $4,492.00. First support is seen at $4,360.00 and then at $4,299.00.
Spot silver bulls' next upside price objective is to drive prices back above $66.495, with a move above that level targeting $71.38 and then $74.63. The next downside price objective for the bears is a break below $64.00, with deeper downside targets at $63.11 and then $60.83. First resistance is seen at $66.495 and then at $71.38. Next support is seen at $64.00 and then at $63.11.
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