Spot gold and silver prices fell sharply late Monday, pressured by rising U.S. Treasury yields, a stronger U.S. dollar, and another surge in oil prices. Although geopolitical risks remain elevated, precious metals are currently reacting more strongly to U.S. monetary policy expectations.

At the time of writing, spot gold was trading near $4,513.70/oz, down 2.16%, while spot silver was at $72.570/oz, down 3.53%. Gold’s intraday range stood between $4,502.40 and $4,630.70/oz, while silver traded between $72.10 and $76.12/oz.

Stronger U.S. Data Weighs on Rate-Cut Expectations

Recent U.S. economic data continued to show signs of resilience. March factory orders rose 1.5% to $630.4 billion, far above the 0.5% consensus forecast. Previously, the ISM Manufacturing PMI for April came in at 52.7%, marking the fourth consecutive month of expansion in U.S. manufacturing activity.

These stronger-than-expected figures reduced expectations that the Federal Reserve would move quickly toward rate cuts. This weighed on gold and silver, as both are non-yielding assets and tend to come under pressure when interest-rate expectations rise.

Higher Yields and a Stronger Dollar Add Direct Pressure

The U.S. 10-year Treasury yield climbed to around 4.44%, while the U.S. Dollar Index rose 0.32% to 98.472. When both yields and the dollar move higher, the opportunity cost of holding gold increases, making precious metals less attractive in the short term.

Rising Oil Prices Keep Markets Cautious

Oil prices also continued to rise amid escalating tensions in the Middle East. WTI crude traded around $104.88 per barrel, while Brent crude hovered near $113.56 per barrel, after briefly rising to $114.44 per barrel.

Higher oil prices can support gold from a safe-haven and inflation-hedge perspective. However, in the short term, they also raise concerns that the Fed may delay monetary easing, adding further pressure on precious metals.

Key Technical Levels to Watch

For gold, bulls need to push prices back above the $4,530–$4,568/oz resistance zone to improve the short-term outlook. If gold can break and hold above this area, the next upside targets would be $4,615/oz and $4,630.70/oz. On the downside, a break below $4,502.40/oz could open the door to further declines toward $4,485/oz and $4,450/oz.

For silver, the key upside zone to reclaim is $73.00–$73.50/oz. A sustained move above this area could target $75.00/oz and $76.12/oz. On the downside, important support is seen at $72.10/oz, followed by $71.00/oz and $70.00/oz.

Conclusion

Gold and silver are under pressure from three key factors: stronger U.S. data, higher Treasury yields, and a firmer U.S. dollar. While geopolitical risks and elevated oil prices may still support the safe-haven role of precious metals, the market is currently more focused on the possibility that the Fed may delay rate cuts.

In the near term, gold needs to reclaim the $4,530–$4,568/oz zone, while silver needs to move back above $73.00–$73.50/oz to ease downside pressure.

Source: Reuters

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