(Kitco NewsWire) – Spot gold and silver prices are higher in early U.S. trading Thursday, as softer labor-market signals, a pullback in Treasury yields and a less-hawkish tone from Fed Governor Christopher Waller helped precious metals extend Wednesday’s rebound. At the time of writing, spot gold was trading near $4,488.80 an ounce, up 2.28%, while spot silver was trading at $66.550, up 1.88% on the session.
The latest positioning remains centered on whether Friday’s August employment report can confirm enough labor-market softness to challenge the September rate-hike trade. Weekly jobless claims rose to 206,000 from a revised 204,000, while continuing claims rose to 1.779 million, keeping the labor market in a low-layoff but slow-hiring pattern. Waller said inflation remains meaningfully above the Fed’s 2% target, but added that he would support holding rates steady if disinflation continues in the data due over the next 2 weeks. The market is still pricing a roughly 60% to 65% chance of a September hike, down from the highs reached during this week’s oil-and-yield shock. The 10-year Treasury yield is trading near 4.77%, below Wednesday’s peak near 4.81%, while the two-year yield has eased to about 4.36%. The next tests are today’s ISM services report at 10 a.m. ET and Friday’s payrolls report at 8:30 a.m. ET.
Gold and silver are trading as relief candidates after a sharp rates-driven selloff. Gold has rebounded from the $4,301 area and is pressing the $4,422 to $4,465 resistance zone identified in the latest technical work, while silver is trying to stabilize near the $66.00 decision level after Wednesday’s bounce from $63.70. The move is still conditional. A softer dollar and lower Treasury yields are helping, but the metals complex remains exposed if services activity is firm, payrolls surprise to the upside or oil keeps inflation expectations elevated.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. Iran fired on Kuwait Thursday in retaliation for U.S. strikes earlier in the week, after the U.S. hit Iranian rocket launchers on an island near the strait and said Iran was preparing to use them to deploy mines in the waterway. Brent crude rose to around $97.33 a barrel and WTI climbed to about $92.92, extending this week’s oil rally and adding to inflation pressure. For gold, the setup remains conflicted: Gulf escalation supports defensive demand, but higher crude raises inflation risk, keeps Fed-hike expectations alive and limits the benefit of lower yields.
Global markets were mixed to weaker ahead of the U.S. open. S&P 500 futures fell 0.1%, Nasdaq futures slipped 0.2% and Dow futures were little changed. In Europe, Germany’s DAX lost 0.1% and France’s CAC 40 declined 0.3%, while London’s FTSE 100 rose 0.2%. Asian markets were mixed, while the yen strengthened sharply after earlier weakness raised intervention concerns.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $92.92 a barrel, while Brent crude was near $97.33. The yield on the benchmark 10-year U.S. Treasury note is trading near 4.77%. The U.S. dollar index is softer. (Kitco Global Index shows how much of today’s gold move is the dollar versus the gold market itself.)
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,465.00 resistance level, with a sustained move targeting $4,573.00. Bears’ next near-term downside price objective is a break below $4,369.00, with deeper downside targets at $4,301.00 and then $4,263.00. First resistance is seen at $4,422.00 and then at $4,465.00. First support is seen at $4,369.00 and then at $4,301.00.
Spot silver bulls’ next upside price objective is to drive prices back above $66.00, with a move above that level targeting $67.21 and then $68.74. The next downside price objective for the bears is a break below $65.26, with deeper downside targets at $63.70 and then $62.57. First resistance is seen at $66.00 and then at $67.21. Next support is seen at $65.26 and then at $63.70.
See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
Leave a Reply