Gold and silver prices moved higher during Monday’s U.S. trading session as markets balanced last week’s weak employment data against a rebound in oil prices, Treasury yields, and expectations for a possible Federal Reserve rate hike.

At the time referenced, spot gold was up 0.4% at around $4,358.71 per ounce, while front-month silver futures rose 2.80% to $65.106 per ounce.

Rising Oil Prices Revive Inflation Concerns

WTI crude climbed to around $79 per barrel, while Brent traded near $85 per barrel.

The main driver was renewed uncertainty over the full reopening of the Strait of Hormuz, as Iran continued to raise conditions related to compensation following U.S. strikes.

Higher oil prices revived concerns that inflationary pressure could return, pushing Treasury yields higher and restoring some expectations for additional Fed tightening.

Fed Rate-Hike Expectations Rebound

Following the weak U.S. jobs report, the implied probability of a September Fed rate hike had fallen to 44.4%.

By Monday, however, that probability had risen back to 51.7% as oil prices and bond yields moved higher.

The U.S. 30-year Treasury yield climbed to 5.244%, while the benchmark 10-year yield traded above 4.7%.

The next major U.S. economic releases include:

• July CPI on Wednesday

• PPI on Thursday

• Retail sales on Friday

Gold Holds Firm Despite Higher Yields

One notable feature of the session was gold’s ability to remain higher even as both the U.S. dollar and Treasury yields strengthened.

From a technical perspective, the $4,360 to $4,380 per ounce area is an important resistance zone. A sustained break above this range could open the way toward $4,480 and then $4,500 per ounce.

On the downside, key support levels are located at $4,299, $4,223, and $4,147 per ounce.

Silver Continues to Show Strong Momentum

Silver outperformed gold during the session.

Near-term resistance is seen at $65.53, followed by $71.56 and $74.63.

On the downside, important support levels are located at $63.00, $61.00, and $60.83.

Conclusion

Precious metals are currently being influenced by two opposing forces: weak employment data, which supports expectations for a less hawkish Fed, and rising oil prices, which are reviving inflation concerns and pushing bond yields higher.

In the short term, developments around the Strait of Hormuz, together with U.S. CPI, PPI, and retail sales data, will be key factors shaping the next move in gold and silver.

Source: Kitco