Gold and silver prices moved higher in late-afternoon US trading on Monday as investors balanced weaker labour market data from last week against rising oil prices, higher Treasury yields and renewed expectations of Federal Reserve rate hikes.
Spot gold traded near $4,358.71 per ounce, gaining 0.4%, while front-month silver futures settled at $65.106 per ounce, up 2.80% on the session.
Markets react to labour data and inflation concerns
North American equity markets pulled back slightly from recent record levels. The S&P 500 declined 4.53 points, or 0.1%, to 7,753.11. The Dow Jones Industrial Average fell 60.95 points, or 0.1%, to 53,975.98, while the Nasdaq Composite dropped 85.26 points, or 0.3%, to 26,605.36. The Russell 2000 declined 17.10 points, or 0.6%, to 3,017.40.
European markets were mixed, with London’s FTSE 100 falling 0.5% to 10,845, France’s CAC 40 down 0.1%, and Germany’s DAX rising 0.35%.
Market sentiment continues to be shaped by the combination of weaker US employment data and renewed inflation concerns linked to energy prices. July payrolls declined by 23,000, while previous months were revised lower. Following the report, the implied probability of a September Federal Reserve rate hike fell to 44.4% from 54.7%.
However, those expectations shifted on Monday as rate hike odds recovered to 51.7%. The 30-year Treasury yield increased by 5 basis points to 5.244%, close to its July 31 closing high of 5.253%.
Oil prices and Strait of Hormuz tensions remain key factors
The next major market focus will be US inflation data. Investors are awaiting the July Consumer Price Index (CPI) report on Wednesday, followed by Producer Price Index (PPI) data on Thursday and retail sales figures on Friday.
The situation around the Strait of Hormuz remains a major influence on inflation expectations. Recent comments from Iran have reduced optimism over a quick reopening of the strategic waterway, with Tehran maintaining demands linked to compensation for US strikes.
Higher oil prices have affected multiple asset classes, pushing crude higher, supporting Treasury yields, partially restoring expectations for Fed tightening and keeping demand for gold resilient despite a stronger interest-rate environment.
Gold and silver technical outlook
Key external markets showed stronger crude prices, with WTI trading near $79 per barrel and Brent crude near $85 per barrel. The US dollar index strengthened, while the benchmark 10-year US Treasury yield remained above 4.7%.
For gold, bullish investors are targeting a move above the $4,360 to $4,380 resistance zone. A sustained breakout could open the way toward $4,480 and then $4,500.
On the downside, bears are watching for a break below $4,299, which could expose support levels at $4,223 and $4,147.
For silver, buyers are looking for a move above $65.53. A breakout could target $71.56 and then $74.63.
Support levels for silver are seen at $63.00, followed by $61.00 and $60.83.
