Spot gold prices were nearly unchanged after Thursday’s close, while spot silver moved higher. The mixed performance came as lower crude oil prices and easing U.S. Treasury yields helped offset the pressure from a firmer U.S. dollar.

At the time of writing, spot gold was trading near $4,542.40 per ounce, down 0.04%, while spot silver was trading around $76.655 per ounce, up 1.03% on the session.

The key market driver was the fading risk premium linked to the Strait of Hormuz, which reduced some of the safe-haven demand for gold.

U.S. Economic Data Sends Mixed Signals

The latest U.S. economic data offered no clear direction for interest rate expectations.

Weekly jobless claims fell by 3,000 to 209,000 for the week ended May 16, suggesting that the labor market remains relatively firm.

However, the housing sector showed some weakness, with April housing starts falling 2.8% to a 1.465 million seasonally adjusted annual rate. On the other hand, building permits rose 5.8% to 1.442 million, indicating that future construction expectations have not deteriorated sharply.

In manufacturing, the Philadelphia Fed Manufacturing Index dropped to -0.4 in May from 26.7 in April. Meanwhile, the flash U.S. manufacturing PMI rose to 55.3, the services PMI slipped to 50.9, and the composite PMI held at 51.7.

Overall, the data suggests that the U.S. economy is not weakening sharply, but it is also not strong enough to create a decisive shift in rate expectations.

Hormuz Remains a Key Geopolitical Risk Channel

The Strait of Hormuz remains an important transmission channel for oil prices, bond yields, and precious metals.

However, Thursday’s trading session reflected a partial unwind of geopolitical risk premium, as U.S.-Iran talks were described as moving toward a possible agreement.

Still, key obstacles remain, including Iran’s uranium stockpile and Tehran’s position on a potential toll system in the strait. President Donald Trump has stated that the Strait of Hormuz should remain an international, toll-free waterway.

As Hormuz-related risks eased, crude oil prices pulled back. This helped reduce inflation concerns and improved sentiment across broader equity markets.

U.S. Stocks Recover as Oil Prices Fall

U.S. equities closed higher after crude oil reversed sharply lower.

The S&P 500 rose 0.2% to 7,445.72.
The Dow Jones Industrial Average gained 0.6% to 50,285.66.
The Nasdaq Composite added 0.1% to 26,293.10.
The Russell 2000 advanced 0.9% to 2,843.45.

The recovery came after Brent crude fell from near $109 per barrel earlier in the session to settle below $103 per barrel. Lower oil prices helped ease Treasury yields and allowed major U.S. indexes to recover from early losses.

Technical Outlook for Gold and Silver

For gold, the first resistance level is seen at $4,550, followed by $4,600. A sustained move above the $4,550 - $4,600 resistance zone could open the door toward $4,660, and then $4,680.

On the downside, initial support is located at $4,530, followed by $4,489.30. A break below this area could expose gold to deeper downside targets at $4,470 and $4,370.

For silver, the key resistance zone stands at $77.24 - $78.00. A breakout above this area could allow silver to target $79.00, followed by $85.00.

Near-term support for silver is seen at $76.14, followed by $75.19 and $74.63.

Gold currently lacks strong safe-haven momentum as the Hormuz risk premium continues to fade. However, lower oil prices and easing Treasury yields are still providing some support for precious metals.

In the near term, gold needs to reclaim the $4,550 - $4,600 zone to confirm renewed upside momentum. Silver, meanwhile, is showing stronger relative performance and needs to break above the $77.24 - $78.00 area to extend its rally.

For now, traders are not only watching the U.S. dollar and Treasury yields, but also crude oil prices and geopolitical developments around the Strait of Hormuz. Any sudden shift in the geopolitical landscape could quickly change the market outlook, because financial markets do love pretending to be calm right before making everyone’s screen look like a Christmas tree.

Source: Reuters