WHAT YOU NEED TO KNOW
  • Spot gold traded near $4,157.80, up 1.06%, while silver gained 0.40% to approximately $60.770.
  • Traders assigned roughly a 70% probability to another Fed rate increase in October as the 10 year Treasury yield approached 5.25%.
  • Upcoming JOLTS, PCE inflation, manufacturing and employment reports could reshape expectations for U.S. interest rates.
  • Gold faces resistance between $4,190.00 and $4,214.00, with initial support at $4,112.00.

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 moved higher in early U.S. trading Tuesday, stabilizing after Monday’s steep selloff. Elevated oil prices, Treasury yields and expectations for another Federal Reserve rate increase continued to restrain the rebound.

Spot gold traded near $4,157.80 an ounce at the time of writing, gaining 1.06% for the session. Spot silver stood near $60.770, an increase of 0.40%.

The recovery left gold above $4,150 but still below the $4,200 level breached during Monday’s decline. Traders now face a packed calendar of U.S. labor, inflation and manufacturing reports that could shape the market’s view of interest rates.

Positioning remains tight around the expected path of U.S. rates after Monday’s bond selloff. Benchmark yields returned to levels last seen before the financial crisis, while traders assigned roughly a 70% probability to another Fed rate increase in October.

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The yield on the benchmark 10 year U.S. Treasury note traded near the 5.25% area. At the same time, the U.S. dollar index held close to a two month high, adding another constraint for bullion prices.

The first major labor test is the August JOLTS job openings report, scheduled for Tuesday at 10:00 a.m. ET. August personal income and PCE inflation figures follow Wednesday at 8:30 a.m. ET.

ISM manufacturing data are due Thursday at 10:00 a.m. ET, followed by the September employment report Friday at 8:30 a.m. ET. The concentrated run of economic releases gives traders several opportunities to reassess expectations for monetary policy.

Stronger labor or inflation figures would keep pressure on gold through the interest rate channel. Softer readings would test whether Monday’s move below $4,200 already accounted for enough tightening risk.

With the Federal Reserve expected to keep interest rates unchanged this month, do you think interest rates should remain where they are instead of being cut?

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Developments involving the Strait of Hormuz and the U.S. and Iran remained the principal geopolitical influence on oil, inflation expectations and gold trading. Crude prices rose for a second consecutive session as continuing supply disruption risks outweighed evidence that Middle East exports were recovering through alternative arrangements.

Those workarounds included ship to ship transfers and increased shipments from Saudi Arabia and the UAE. Regional exports climbed to 12.8 million barrels per day in September, although higher logistics costs and uncertainty surrounding the strait persisted.

Brent crude traded near $106.77 a barrel in early activity, while Nymex WTI crude stood near $93.94. The impact on precious metals remained divided between demand for safety and the consequences of higher energy costs.

War risk supported safe haven interest in bullion, but inflation concerns linked to oil also lifted yields and expectations for tighter Fed policy. That combination increased the opportunity cost of holding metals that provide no yield.

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The broader global risk environment was cautious but somewhat steadier before the U.S. market opened. U.S. stock index futures edged higher as technology shares found support following Monday’s selloff, although oil prices and bond yields continued to limit risk appetite.

At 7:20 a.m. ET, Dow futures were up 52 points, S&P 500 futures had gained 9 points and Nasdaq 100 futures were 72 points higher. Chip related shares recovered modestly as investors awaited Fed speakers and the approaching labor and inflation reports.

For spot gold, the next objective for bulls is a return above the resistance zone between $4,190.00 and $4,214.00. A sustained advance through that area would place $4,238.00 and then $4,254.44 in view.

Gold bears are seeking a break below $4,112.00, followed by deeper downside objectives at $4,073.00 and $4,030.00. Initial resistance remains at $4,190.00 and $4,214.00, while the first support levels are $4,112.00 and $4,073.00.

Silver bulls are targeting a recovery above the area from $61.450 to $62.180. A move through that zone would bring $63.150 and $64.080 into focus.

For silver bears, the next objective is a break beneath $60.310, with lower targets at $59.520 and $58.770. Initial resistance is positioned at $61.450 and $62.180, while support stands at $60.310 and $59.520.

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.