Gold and silver prices edged higher during the U.S. trading session as crude oil prices fell sharply, Treasury yields eased, and the U.S. dollar weakened. These factors offset weaker safe-haven demand as tensions between the United States and Iran showed signs of easing.

Spot gold traded around $4,056.60 per ounce, up 0.37%, while spot silver gained 0.87% to $57.94 per ounce.

The Fed Remains the Main Market Driver

The Federal Reserve kept interest rates unchanged within the 3.50% to 3.75% range in a 9-3 vote, with three officials supporting a 25-basis-point increase.

Recent data showed that headline PCE inflation eased to 3.7% year over year in June, while core PCE stood at 3.3%. Initial jobless claims also rose to 197,000.

Markets continue to see a relatively high chance of a Fed rate increase in September, although those expectations have eased as oil prices and Treasury yields moved lower.

Lower Oil Prices Reduce Pressure on Gold

President Donald Trump postponed planned strikes on Iran and pushed for negotiations concerning the Strait of Hormuz. However, Iran denied holding direct talks with the United States, suggesting that geopolitical risks have not completely disappeared.

WTI crude fell to around $78.85 per barrel, while Brent traded near $82.91 per barrel.

The impact on gold is two-sided. Easing tensions reduce safe-haven demand, but lower oil prices also reduce inflation pressure, weaken the U.S. dollar, and push Treasury yields lower, thereby supporting precious metals.

Gold and Silver Remain in Consolidation

Despite receiving support from a more favorable macroeconomic environment, gold and silver have not yet broken out of their consolidation ranges.

Their next direction will depend on new signals from the Fed, movements in Treasury yields, the strength of the U.S. dollar, and developments around the Strait of Hormuz.

Conclusion

Gold remains stable as lower oil prices, a weaker U.S. dollar, and easing Treasury yields provide support. However, a new trend has yet to be confirmed as markets continue to await additional data and clearer guidance from the Fed.

Source: Reuters