DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Gold and silver suffered sharp losses in late afternoon United States trading Tuesday as surging crude oil prices and a worldwide bond selloff drove Treasury yields higher. Spot gold traded near $4,327.70 an ounce, down 2.68%, while spot silver sank 3.71% to $63.950.

The pressure came from renewed expectations that the Federal Reserve could still raise interest rates this month. Markets assigned roughly a 66% probability to a September increase, creating a punishing backdrop for metals that provide no yield.

Wall Street also closed broadly lower as expensive oil and rising borrowing costs damaged risk appetite. The S&P 500 lost 54.67 points, or 0.7%, to 7,631.47, while the Dow Jones Industrial Average dropped 419.02 points, or 0.8%, to 52,766.88.

Technology and smaller companies fared even worse during the session. The Nasdaq Composite declined 271.11 points, or 1.0%, to 26,099.77, and the Russell 2000 slid 36.32 points, or 1.2%, to 2,920.13.

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European equities joined the retreat, confirming that the selloff was not confined to American markets. The STOXX Europe 600 fell 0.56%, while major indexes in London, Frankfurt, Paris and Milan all ended lower.

Investor positioning remains tied to the rate repricing that followed Jackson Hole and to this week’s labor market reports. July job openings edged up to 7.3 million, while the August ISM manufacturing index eased to 54.6 from 55.6 but remained firmly in expansion territory.

Those figures were not soft enough to break the market’s hawkish Federal Reserve trade. The two year Treasury yield climbed to 4.39%, the benchmark 10 year yield reached 4.79% and the United States dollar index strengthened.

The next major tests include Wednesday’s ADP employment report, Thursday’s jobless claims and ISM services figures, followed by Friday’s August nonfarm payrolls report. Strong employment data would support higher yields and tighter policy expectations, while a decisive downside surprise could give bullion room to recover.

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Gold traded as part of the broader yield shock rather than benefiting from defensive demand. The metal broke below its 20 day and 100 day moving averages, touched a nine day low and tested the crucial support zone between $4,329 and $4,311.

Silver’s technical damage was equally severe after last week’s reversal from $71.18. Prices broke beneath $65.64 and then $64.67 as sellers pressed their advantage, leaving Friday’s payroll report as a potentially decisive catalyst for both metals.

Geopolitical tensions added another complicated layer after fresh United States military strikes on Iran sent energy prices sharply higher. Brent crude surged 4.6% to $94.65 a barrel, while Nymex WTI crude jumped 5.2% to $90.22 for its first close above $90 in more than a month.

The war has effectively closed the Strait of Hormuz, which normally handles roughly 20% of global oil shipments. That disruption could support gold through defensive buying, but it also raises inflation expectations, strengthens the case for tighter monetary policy and increases the cost of holding assets that pay no interest.

For gold bulls, the first challenge is reclaiming resistance at $4,450. A sustained move above that barrier would bring $4,532 into view, followed by the larger upside target at $4,774.

Gold bears are focused squarely on the $4,311 floor. A confirmed break beneath that level could expose $4,216 and then $4,203, while immediate support remains concentrated at $4,329 and $4,311.

Silver bulls must first push the market back above $64.67, followed by resistance at $65.64 and $66.87. On the downside, a breach of $62.98 would threaten a deeper slide toward $61.51 and eventually $60.835.

The immediate contest is now between geopolitical fear and monetary pressure. Unless employment data weaken enough to challenge the September rate increase trade, firm Treasury yields and a stronger dollar are likely to remain the dominant forces confronting precious metals.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.