Spot gold and silver prices rose ahead of the North American market open Friday, with spot gold trading near $4,046.20 an ounce (up 0.50%) and spot silver near $58.240 (up 0.84%), as a softer U.S. dollar provided room for metals to rebound. The gains occurred as traders balanced sticky inflation data, Federal Reserve rate-hike risk, and a reduced acute threat from the Strait of Hormuz. Thursday's U.S. inflation update showed May PCE inflation at 4.1% year-over-year with personal income and consumer spending both rising 0.7% monthly, reinforcing that monetary easing is not the base case for the July 28-29 FOMC meeting even as lower oil prices reduced immediate inflation pressure from the Middle East shock.
U.S. Inflation Data Reinforces Fed Constraint Before July FOMC Meeting
Thursday's U.S. inflation update kept the Fed constraint in place before the cash equity open. May PCE inflation rose 4.1% from a year earlier, while personal income and consumer spending both rose 0.7% on the month. The data reinforced the view that easing is not the base case for the July 28-29 FOMC meeting, even as lower oil prices have reduced the immediate inflation impulse from the Middle East shock.
June 17 Federal Reserve Meeting Anchors Precious Metals Positioning
The June 17 Federal Reserve meeting remains the main positioning anchor for precious metals. Since the meeting, the cross-asset reaction has been a dollar-and-rates repricing rather than a sustained safe-haven bid. The U.S. dollar index was lower near 101.22 at 8:39 a.m. ET but remained close to its 52-week high of 101.80, while the 10-year Treasury yield was near the 4.4% area.
Strait of Hormuz Vessel Traffic Doubles to Highest Level Since Late February
The Strait of Hormuz situation has shifted from closure shock to managed transit risk. Vessel traffic through the strait doubled over the prior 24 hours Thursday to the highest level since late February, and ships were again transiting with satellite signals switched on, helping push Brent crude back toward prewar levels. A Singapore-flagged commercial vessel was struck near the Oman coast Thursday evening, and a U.S. official said an Iranian drone hit the ship. The current market impact is narrower than last week's panic premium, with oil lower, the dollar softer and gold carrying an insurance bid rather than a full geopolitical squeeze.
WTI Crude Trades Near $69.67 as Dollar Index Eases
The key outside markets see Nymex WTI crude oil prices lower and trading around $69.67 a barrel, while Brent crude was near $73.05. The U.S. dollar index is lower. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.4% area.
Spot Gold Technical Levels Target $4,122.00 Resistance Zone
Technically, spot gold bulls' next upside price objective is to push prices back above the $4,023.00 to $4,045.00 resistance zone, with a sustained move targeting $4,122.00 and then $4,170.85. Bears' next near-term downside price objective is a break below $3,959.08, with deeper downside targets at $3,886.46 and then $3,850.00. First resistance is seen at $4,045.00 and then at $4,122.00. First support is seen at $3,959.08 and then at $3,886.46.
Spot Silver Bulls Eye $58.77 to $61.55 Resistance Area
Spot silver bulls' next upside price objective is to drive prices back above the $58.77 to $61.55 area, with a move above that zone targeting $62.00 and then $72.00. The next downside price objective for the bears is a break below $55.40, with deeper downside targets at $51.64 and then $48.97. First resistance is seen at $58.77 and then at $61.55. Next support is seen at $55.40 and then at $51.64.
FAQ
What caused gold and silver prices to rise Friday?
Spot gold and silver prices rose ahead of the North American market open Friday as a softer U.S. dollar gave metals room to rebound. Spot gold traded near $4,046.20 an ounce (up 0.50%) and spot silver near $58.240 (up 0.84%). Traders balanced sticky inflation data, Federal Reserve rate-hike risk, and a reduced acute threat from the Strait of Hormuz.
What did the May U.S. inflation data show?
Thursday's U.S. inflation update showed May PCE inflation rose 4.1% from a year earlier, while personal income and consumer spending both rose 0.7% on the month. The data reinforced the view that monetary easing is not the base case for the July 28-29 FOMC meeting, even as lower oil prices reduced the immediate inflation impulse from the Middle East shock.
How did the Strait of Hormuz situation affect markets Thursday?
Vessel traffic through the Strait of Hormuz doubled over the prior 24 hours Thursday to the highest level since late February, with ships transiting with satellite signals switched on. A Singapore-flagged commercial vessel was struck near the Oman coast Thursday evening, and a U.S. official said an Iranian drone hit the ship. The current market impact is narrower than last week's panic premium, with oil lower, the dollar softer, and gold carrying an insurance bid rather than a full geopolitical squeeze.
