Following the close of Tuesday’s trading session in the U.S., the precious metals market recorded several notable developments. While silver prices posted a strong gain, gold’s upside was capped by a stronger U.S. dollar and elevated Treasury yields. Let’s take a closer look at the key macroeconomic and technical factors currently driving the market.

Precious Metals: Silver Leads, Gold Remains Cautious

• Spot Silver: Shone brightly with a 1.63% gain, trading around $66.970 per ounce.

• Spot Gold: Posted a modest 0.32% increase, reaching $4,356.80 per ounce. Gold’s upside remained limited as the U.S. 10-year Treasury yield held elevated at 5.0%, while the U.S. dollar remained strong, with the Dollar Index hovering around 100.48.

Geopolitical Risks Ease, Oil Prices Decline

Tensions surrounding the Strait of Hormuz eased as Iran signaled that it could reopen the shipping route within the next few days if the U.S. reduces pressure. At the same time, Saudi Arabia resumed exports through the East-West Pipeline and the port of Yanbu.

As a result, oil prices broadly weakened. Brent crude fell to around $99.25 per barrel, while WTI crude traded in the lower $90s per barrel.

The decline in oil prices helped ease near-term inflationary pressures, providing some support for silver and equities. At the same time, it reduced part of gold’s safe-haven demand.

Mixed Equity Markets & The Fed’s Policy Dilemma

Global equity markets showed mixed performance:

• U.S. Markets: After Monday’s rally led by the AI sector, U.S. markets closed mixed on Tuesday. The Nasdaq reached a new record high, rising 0.5% to 27,244.28, while the Russell 2000 also gained 0.5%. Meanwhile, the S&P 500 edged down by less than 0.1%, and the Dow Jones fell 0.4%.

• European Markets: Trading was relatively subdued. The Stoxx 600 gained 0.13%, Germany’s DAX was broadly flat, while the FTSE 100 in the U.K. and Italy’s FTSE MIB closed in negative territory.

Macro Focus: The Fed’s Next Move

Investors are now questioning whether the Fed’s September rate hike represents a temporary adjustment or the beginning of a new tightening cycle.

At present, markets are pricing in a 53.1% probability of another 25-basis-point rate hike by the Fed in October. Attention is now turning to upcoming key economic indicators, including PMI data, employment figures, and consumer sentiment, which could provide further clues about the Fed’s next policy direction.

Conclusion

The market is entering a highly sensitive phase, with price movements increasingly influenced by upcoming economic data.

If economic indicators such as PMI come in stronger than expected, gold could remain under pressure. Conversely, softer-than-expected data could create room for gold to move toward the $4,400 per ounce level.

Stay disciplined and manage risk carefully.

Note: All prices and market data in this article were updated at the close of the U.S. trading session on Tuesday.

Source: Kitco