Gold prices edged higher in U.S. trading on Tuesday as declining Treasury yields and weaker economic data supported demand for the precious metal. Silver moved lower as investors took profits following its recent rally.
Spot gold traded near $4,653.40 per ounce, gaining 0.05% on the session, while spot silver declined 0.53% to $68.470 per ounce.
Economic Data Pushes Treasury Yields Lower
Recent U.S. economic indicators reinforced expectations of slower growth and helped push bond yields lower. The Conference Board’s consumer confidence index fell to 89.4 in August from 90.2 in July, while the expectations index dropped 5.8 points to 68.2.
New home sales also weakened, declining 10.5% in July, a sharper drop than economists expected. Following the data, Treasury yields moved lower, with the 10-year yield falling to 4.638%, the 30-year yield declining to 5.174%, and the two-year yield reaching 4.195%.
Markets remain caught between concerns about slowing economic activity and persistent inflation risks. While rate futures continue to price a September hold as the most likely outcome, investors are watching upcoming inflation data and Federal Reserve Chair Kevin Warsh’s Jackson Hole speech for further signals on monetary policy.
Commodity strategist Ole Hansen of Saxo said gold’s recent weakness was mainly driven by profit-taking after the metal gained approximately 7% over five trading sessions.
U.S. Debt Concerns Continue Supporting Gold Demand
The U.S. Treasury’s decision to expand buybacks of longer-term government bonds remains a key factor influencing gold markets. The Treasury increased the maximum size of operations involving 10-year to 20-year and 20-year to 30-year securities from $2 billion to at least $4 billion per operation.
The move comes as total U.S. government debt surpassed $40 trillion, reaching $40.033 trillion in outstanding obligations on August 21. Although Treasury buybacks have reduced pressure on long-term bond markets, they have also intensified discussions about fiscal sustainability, supporting gold’s appeal as a hedge against currency and debt risks.
Stock Markets Rise as Oil and Yields Decline
North American equity markets closed higher as lower oil prices and falling bond yields improved investor sentiment.
The Dow Jones Industrial Average gained 160.24 points, or 0.30%, to close at 53,577.40. The S&P 500 advanced 24.42 points, or 0.32%, to 7,677.28, while the Nasdaq Composite rose 171.11 points, or 0.66%, to 26,151.30.
Canada’s S&P/TSX Composite also gained 0.66% to 36,957.63, supported by technology companies, banking results, and mining stocks.
European markets were mostly positive as lower energy prices and reduced concerns over an immediate escalation in the Middle East improved market sentiment. The Stoxx Europe 600 increased 0.35%, Germany’s DAX gained 0.61%, the U.K.’s FTSE 100 rose 0.29%, and Switzerland’s SMI advanced 0.54%. France’s CAC 40 was the exception, declining 0.16%.
Oil Prices Decline Despite Middle East Tensions
The Strait of Hormuz remains a major geopolitical risk factor, but Tuesday’s trading showed a smaller immediate supply disruption premium compared with the previous week.
Oil prices declined despite additional U.S. sanctions pressure on Iran and continued restrictions around navigation through the strait. Reports of mediation efforts involving Pakistan and Oman, including discussions about reopening safer shipping routes, helped limit crude price gains.
Brent crude fell into the high-$80 range, while West Texas Intermediate settled near $82.36 per barrel. Gold maintained support from fiscal and geopolitical concerns but was unable to sustain a move toward $4,700.
Gold and Silver Technical Outlook
For gold, the next upside target for buyers is a move above the $4,657.73 to $4,692.00 resistance zone. A sustained breakout could open the path toward $4,770 and then $4,900.
On the downside, sellers are focused on a break below $4,610.99, which could lead to further declines toward $4,597.90 and $4,577.95. Initial resistance levels are located at $4,657.73 and $4,692.00, while support is found at $4,610.99 and $4,597.90.
For silver, buyers are looking for a move above the $69.59 to $70.38 resistance area. A breakout could target $72.00 and potentially $90.00.
Silver bears are watching for a move below $69.02, with additional downside targets at $68.67 and $68.10. Initial resistance levels are at $69.59 and $70.38, while support levels stand at $69.02 and $68.67.
