Gold and silver continued to rise in late U.S. trading on Friday, supported by a weaker U.S. dollar, concerns over U.S. fiscal risks, and ongoing uncertainty surrounding the Strait of Hormuz.

At the time of writing, spot gold was trading around $4,602.99 per ounce, up 1.86%, while spot silver rose 1.29% to $68.97 per ounce.

Weaker Dollar Continues to Support Gold

The U.S. Dollar Index fell below 99, reducing pressure on dollar-denominated assets.

At the same time, concerns over the U.S. fiscal outlook remain unresolved. Although the U.S. Treasury has announced plans to expand long-term bond buybacks, yields remain elevated:

• U.S. 10-year Treasury yield: around 4.7%

• U.S. 30-year Treasury yield: around 5.3%

This suggests that investors remain concerned about government debt risks and the large supply of long-term Treasury securities.

U.S. Economic Data Remain Relatively Strong

The preliminary U.S. Composite PMI for August rose to 56.0, its highest level in more than four years.

Specifically:

• Services PMI rose to 56.8

• Manufacturing PMI fell to 53.2, a five-month low

Strong economic data continue to complicate the Federal Reserve’s policy outlook. Minutes from the latest Fed meeting showed that several officials remain prepared to raise interest rates if inflation fails to cool further.

However, markets are still leaning toward the Fed keeping rates unchanged in September.

Gold Breaks Above Key Technical Levels

Gold reached an intraday high of $4,632.90 per ounce, breaking above the previous technical objective at $4,595.

Key levels to watch now include:

Resistance:

• $4,653.25

• $4,852.91

Support:

• $4,453.59

• $4,382.83

• $4,253.93

If gold can hold above the current breakout zone, bullish momentum may remain intact.

Silver Continues to Show Strong Momentum

Silver has broken through $66.55, $68.02, and $69.48 during the week, reaching as high as $70.14.

The next resistance levels are:

• $70.14

• $71.56

• $72.08

Silver is being supported not only by macroeconomic factors, but also by industrial demand and concerns over supply deficits.

Strait of Hormuz Tensions Remain a Key Risk

U.S.-Iran negotiations remain stalled, while commercial traffic through the Strait of Hormuz is still well below pre-conflict levels.

Brent crude is trading around $93.29 per barrel, while WTI is near $84.34 per barrel.

This creates two opposing forces for gold:

• Geopolitical risks support safe-haven demand.

• High oil prices increase inflation risks, making it more difficult for Treasury yields to decline significantly.

Conclusion

Gold and silver continue to benefit from a combination of U.S. dollar weakness, fiscal concerns, and geopolitical risks, despite elevated U.S. Treasury yields.

In the near term, markets will focus on the July PCE inflation report, Treasury yield movements, and Fed Chair Kevin Warsh’s remarks at Jackson Hole for further clues about the monetary policy outlook.

From a technical perspective, gold needs to hold above its current breakout zone to strengthen the bullish case, while silver continues to show stronger momentum within the precious-metals complex.

This article is for informational and market analysis purposes only and does not constitute investment advice.

Source: Kitco