Gold and silver prices rose sharply during Tuesday’s U.S. trading session as safe-haven demand and short covering outweighed pressure from higher Treasury yields, a stronger U.S. dollar and rising crude oil prices amid the U.S.–Iran conflict.

At the time of writing, spot gold was trading near $4,128.20 per ounce, up 1.83%, while spot silver climbed 4.29% to around $58.70 per ounce.

Gold Reclaims the $4,000 Level

Gold traded between $3,998.80 and $4,087.30 per ounce during the session.

The rally pushed prices back above the $4,000 level and through the key corrective zone between $4,041.65 and $4,072.40, allowing buyers to regain the short-term technical advantage.

Silver traded between $56.00 and $59.37 per ounce. The metal recovered above its 50-period moving average near $57.68 and approached resistance around $59.15.

Safe-Haven Demand Outweighs Interest Rate Pressure

Precious metals remain caught between several competing forces.

Continued tensions around the Strait of Hormuz, fresh U.S.–Iran attacks and the risk of further shipping disruptions in the Red Sea supported defensive demand for gold.

However, higher Treasury yields and a stronger dollar typically limit gains in non-yielding precious metals. The benchmark U.S. 10-year Treasury yield rose to around 4.63%, while the U.S. Dollar Index traded near 101.22.

Markets are currently pricing in roughly a 63% probability of a Federal Reserve rate hike in September, meaning interest rate risk has not fully faded.

Higher Oil Prices Add to Inflation Concerns

Oil prices continued to rise as the threat of supply disruptions in the Middle East intensified.

WTI crude settled near $84.91 per barrel, while Brent crude closed around $91.01 per barrel.

Higher oil prices support gold through increased geopolitical uncertainty, but they can also fuel inflation, push bond yields higher and strengthen expectations of tighter monetary policy. As a result, gold may remain volatile rather than establish a clear one-way trend.

Technical Outlook

For gold, initial resistance is located at $4,087.30. A sustained break above this level could open the way toward $4,162.36, followed by $4,214.34.

On the downside, initial support stands at $4,041.65, followed by $3,998.80. A break below that area could expose $3,959.80 and $3,942.10.

For silver, near-term resistance is seen at $59.15, followed by $62.75 and $64.86. Support is located at $56.00, followed by $54.92.

Conclusion

The strong gains in gold and silver suggest that safe-haven demand currently holds the upper hand, despite elevated bond yields and a stronger U.S. dollar.

Traders will continue to monitor ceasefire developments, Federal Reserve signals, preliminary PMI data and any further disruption to shipping routes through the Strait of Hormuz or the Red Sea.

Source: Kitco