(Kitco NewsWire) - Spot gold and silver prices are lower in early U.S. trading Tuesday, as rising oil prices and elevated Treasury yields kept pressure on non-yielding metals ahead of this week’s U.S. inflation reports. At the time of writing, spot gold was trading near $4,392.60 an ounce, down 0.28%, while spot silver was trading at $65.740, down 0.47% on the session.
The latest positioning remains built around the strong August payrolls report and the final inflation tests before the Fed’s Sept. 15-16 meeting. Markets are pricing roughly a 60% probability of a September rate hike after last week’s 162,000 payroll gain, while traders now turn to Thursday’s Producer Price Index and Friday’s Consumer Price Index for confirmation on whether inflation is strong enough to validate that pricing. The two-year Treasury yield is trading near 4.36%, the 10-year yield is near 4.78% to 4.81%, and the 30-year yield is near 5.27%. For gold, the setup is rate-negative unless the inflation data cool materially: strong CPI or PPI would reinforce the hike case, lift yields and weigh on bullion, while softer inflation would revive the Waller-led pause argument and could trigger short-covering.
Gold and silver remain caught between defensive demand and the rates channel. Gold is trying to hold above the $4,365 support level after repeated failures below the $4,422 to $4,465 resistance zone, while silver is compressing below $67.21 as the market waits for the next macro break. The weaker dollar is providing some support, but oil-led inflation pressure and elevated yields are still the dominant constraints. The short-term metals trade is therefore less about safe-haven demand alone and more about whether the inflation data break the current 60% Fed-hike pricing.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. Oil prices are rising again after reports of attacks on Saudi energy infrastructure and continued U.S.-Iran escalation around Gulf shipping, with Brent crude trading near $98.50 to $99.20 a barrel and WTI near $93.80 to $94.40. Shipping risk through Hormuz and the Red Sea is keeping a supply-risk premium in energy markets, and Goldman Sachs warned Brent could exceed $120 in a prolonged disruption scenario. For gold, the impact remains conflicted: Hormuz risk supports safe-haven demand, but higher crude raises inflation risk, pushes bond yields higher and strengthens the case for another Fed hike.
Global markets were weaker ahead of the U.S. open. S&P 500 futures fell about 0.3% to 0.4%, Dow futures dropped roughly 0.8% to 0.9% and Nasdaq futures were flat to modestly lower as higher oil and bond yields weighed on risk appetite. In Europe, the STOXX 600 was lower, while Asian markets were mostly weaker, with Japan’s Nikkei 225 down 1.7% and South Korea’s Kospi down 0.6%.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $94.00 a barrel, while Brent crude was near $99.00. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.8% 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 $4,422.00 resistance level, with a sustained move targeting $4,465.00 and then $4,564.00. Bears' next near-term downside price objective is a break below $4,365.00, with deeper downside targets at $4,305.00 and then $4,263.00. First resistance is seen at $4,422.00 and then at $4,465.00. First support is seen at $4,365.00 and then at $4,305.00.
Spot silver bulls' next upside price objective is to drive prices back above $67.21, with a move above that level targeting $68.74 and then $70.76. The next downside price objective for the bears is a break below $64.73, with deeper downside targets at $62.57 and then $60.00. First resistance is seen at $67.21 and then at $68.74. Next support is seen at $64.73 and then at $62.57.
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