Gold and silver prices moved higher in Monday’s U.S. trading session, supported by a weaker U.S. dollar and reduced expectations for further Federal Reserve rate hikes. Meanwhile, a sharp rise in crude oil prices pushed Treasury yields higher and weighed on global equity markets.

At the time of writing, spot gold was trading around $4,414.30 per ounce, up 0.88%, while spot silver rose 1.66% to $65.650 per ounce.

Oil Surge Revives Inflation Concerns

Tensions surrounding the Strait of Hormuz remain a key focus for energy markets as tanker traffic has been disrupted and U.S.-Iran negotiations remain stalled.

Brent crude climbed above $90 per barrel, while WTI crude traded around $84.58 per barrel.

The rise in oil prices has renewed concerns about inflation, pushing the yield on the 10-year U.S. Treasury toward the 4.70%–4.73% range.

This creates two opposing forces for gold:

• A weaker U.S. dollar and lower expectations for further Fed rate hikes support gold prices.

• Higher Treasury yields limit the upside potential for precious metals.

U.S. Stocks Close Lower

Rising oil prices and renewed inflation concerns pressured major U.S. stock indexes:

• S&P 500: down 0.52% to 7,745.37.

• Dow Jones Industrial Average: down 0.51% to 53,460.02.

• Nasdaq Composite: down 0.32% to 26,644.91.

Major European equity markets also finished lower, reflecting increasingly cautious investor sentiment amid developments in energy prices, inflation and interest rates.

U.S. Economic Data Sends Mixed Signals

Recent economic data, including weaker retail sales, cooler CPI inflation, flat headline PPI and declining consumer sentiment, have reduced market expectations for another Federal Reserve rate hike in September.

However, the Empire State Manufacturing Survey provided a stronger signal, with the general business conditions index rising to 20.6, its highest level in more than four years. The prices-paid index also climbed to 58.6, suggesting that inflationary pressures remain an important factor to monitor.

The market’s next major focus will be the Federal Reserve’s July meeting minutes, followed by flash PMI data later in the week.

Key Technical Levels for Gold and Silver

Gold

Gold is currently facing immediate resistance around $4,447.66 per ounce.

A sustained break above this level could open the way toward:

$4,533.68 → $4,571.83 per ounce.

On the downside, key support levels are located at:

$4,326.22 → $4,275.62 → $4,189.60 per ounce.

Silver

For silver, the key near-term resistance level stands at $67.0587 per ounce.

A break above this level could bring the following targets into focus:

$68.0847 → $69.5353 per ounce.

Key support levels are currently seen at:

$65.4313 → $64.6422 → $62.0394 per ounce.

Conclusion

Precious metals are currently benefiting from a combination of U.S. dollar weakness, lower expectations for further Fed rate hikes and defensive demand driven by geopolitical uncertainty.

However, crude oil trading above $90 per barrel is adding to inflation concerns and keeping U.S. Treasury yields elevated.

As a result, developments in crude oil prices, Treasury yields, Federal Reserve policy and tensions surrounding the Strait of Hormuz are likely to remain key drivers of gold and silver prices in the near term.

Source: Kitco