Precious metals moved lower after Thursday’s session, with silver coming under significantly stronger selling pressure than gold. The main drivers were rising U.S. Treasury yields and a stronger U.S. dollar, which reduced the appeal of non-yielding assets such as gold and silver.

At the time of writing, spot gold was trading near $4,650.30 per ounce, down 0.80%, while spot silver fell sharply by 4.58% to around $83.36 per ounce.

Higher Yields and a Stronger Dollar Pressure Precious Metals

The latest U.S. economic data presented a mixed macro picture. April retail sales rose 0.5% to $757.1 billion, following a 1.6% gain in March. Total retail sales from February through April were up 4.4% compared with the same period a year earlier.

Meanwhile, initial jobless claims increased by 12,000 to 211,000 for the week ended May 9. Continuing claims also rose to 1.782 million.

These figures suggest that consumer spending remains relatively resilient, while the labor market is beginning to show mild signs of softening. However, U.S. Treasury yields remain elevated, with the benchmark 10-year yield hovering near the 4.5% area, continuing to weigh on gold and silver prices.

Strait of Hormuz Tensions Continue to Support Safe-Haven Demand

Despite pressure from the dollar and yields, gold still received some support from geopolitical risks surrounding the Strait of Hormuz. The waterway remains a key variable for energy markets, gold, and defensive assets.

According to reports, a ship anchored near Fujairah was seized and taken toward Iranian waters. In addition, an Indian-flagged cargo ship sank near Oman after an attack. Iran has continued to assert sovereignty over the Strait of Hormuz, a route that carried roughly one-fifth of the world’s oil before the war.

This risk has affected oil markets, shipping insurance, global equities, and the U.S. dollar. For gold, the impact is two-sided: geopolitical tensions support safe-haven demand, but higher oil prices increase inflation concerns, keeping yields elevated and placing renewed pressure on gold.

Gold Holds Elevated Levels, While Silver Faces Sharper Pressure

On Comex, May gold futures settled down 0.42% at $4,678.10 per ounce. Meanwhile, silver futures dropped 4.47% to $84.912 per ounce, marking their largest one-day decline since March.

Silver tends to be more volatile than gold because it functions both as a precious metal and as an industrial metal. When the dollar strengthens and yields rise, silver can face heavier selling pressure, especially after a strong prior rally.

Oil Remains High as U.S. Stocks Close Higher

Outside markets also remained in focus. WTI crude was trading near $100.93 per barrel, while Brent crude stood close to $106.37 per barrel. The U.S. dollar continued to strengthen, reinforcing pressure on precious metals.

By contrast, U.S. equities closed higher. The S&P 500 rose 0.8% to a record 7,501.24, the Dow Jones Industrial Average gained 0.7% to 50,063.46, and the Nasdaq Composite advanced 0.9% to 26,635.22.

Key Technical Levels to Watch

For spot gold, the nearest resistance zone is seen at $4,711 - $4,723 per ounce. A sustained move above this area could open the door toward the next target around $4,774 per ounce. On the downside, a break below $4,686 per ounce could extend selling pressure toward $4,561 per ounce.

For spot silver, bulls need to push prices back above the $84.00 - $84.90 per ounce zone to improve the short-term outlook. A breakout above this area could target $85.75 and then $87.37 per ounce. On the downside, near-term support is seen at $83.15, followed by $82.25 and $80.63 per ounce.

Conclusion

Silver’s sharp decline, while gold remained above $4,650 per ounce, reflects the ongoing tug-of-war between safe-haven demand and pressure from elevated Treasury yields and a stronger U.S. dollar.

In the near term, precious metals will likely remain driven by three key factors: U.S. yields, dollar strength, and tensions around the Strait of Hormuz. If yields stay elevated, gold and silver may remain under pressure. However, geopolitical risks and high oil prices could continue to support defensive demand.

Source: Kitco

Disclaimer: This content is for market research and informational purposes only and does not constitute investment advice.