(Kitco NewsWire) - Spot gold and silver prices are higher in late-afternoon U.S. trading Friday, as a weaker U.S. dollar and reduced Federal Reserve rate-hike expectations outweighed firmer Treasury yields tied to renewed oil-market risk. At the time of writing, spot gold was trading near $4,373.50 an ounce, up 0.53%, while spot silver was trading at $64.530, up 0.32% on the session.
North American equity markets closed slightly lower after touching record territory earlier in the week. The S&P 500 fell 0.2% to 7,785.76, the Dow Jones Industrial Average lost 0.2% to 53,732.41, the Nasdaq Composite slipped 0.3% to 26,729.16 and the Russell 2000 rose 0.5% to 3,068.42. European markets finished mixed. The CAC 40 fell 0.16% to 8,636.80, the FTSE 100 lost 0.21% to 10,750.11, Germany’s DAX gained 0.51% and the Stoxx 600 declined 0.21%.
The latest positioning remains split between weaker U.S. growth data and oil-driven inflation risk. July retail sales fell 0.6%, against expectations for a 0.1% increase, while the University of Michigan’s preliminary August consumer-sentiment index fell to 51.0 from 55.2. The retail-sales miss, Wednesday’s cooler CPI and Thursday’s flat headline PPI pushed the market-implied probability of a September Fed rate hike down near 29%, from about 34% Thursday night. The rate relief supported gold through the dollar channel, but the 10-year Treasury yield still finished near the 4.7% area as crude oil rose and traders looked ahead to the August employment and inflation reports that will arrive before the September Fed meeting.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. Talks between the U.S. and Iran over reopening the waterway remain stalled, two more ships were attacked and Washington has signaled it can maintain a naval blockade of Iran indefinitely. Brent crude traded near $88 a barrel and WTI crude near the $82 area as the standoff kept energy-supply risk in the market. For gold, the impact remains two-sided: weaker data and a softer dollar support non-yielding metals, while restricted Gulf shipping and higher crude keep the inflation-risk premium alive and limit the decline in yields.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $82.78 a barrel, while Brent crude was near $88.45. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area. The U.S. dollar index is softer. (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.)
Technically, spot gold bulls' next upside price objective is to push prices back above the $4,416.82 resistance level, with a sustained move targeting $4,481.78 and then $4,503.19. Bears' next near-term downside price objective is a break below $4,311.04, with deeper downside targets at $4,195.96 and then $4,136.05. First resistance is seen at $4,416.82 and then at $4,481.78. First support is seen at $4,311.04 and then at $4,195.96.
Spot silver bulls' next upside price objective is to drive prices back above $65.44, with a move above that level targeting $66.83 and then $71.00. The next downside price objective for the bears is a break below $64.16, with deeper downside targets at $63.10 and then $60.87. First resistance is seen at $65.44 and then at $66.83. Next support is seen at $64.16 and then at $63.10.
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