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 extended their powerful advance Friday afternoon as a weakening U.S. dollar, mounting fiscal anxiety and persistent uncertainty surrounding the Strait of Hormuz kept buyers firmly engaged. The rally continued even as elevated Treasury yields presented a stubborn obstacle for precious metals.

Spot gold traded near $4,602.99 an ounce at the time of reporting, marking a gain of 1.86 percent for the session. Spot silver climbed 1.29 percent to approximately $68.970 after briefly pushing above the psychologically important $70 level.

North American stocks also closed higher, recovering part of the damage from a volatile week. The S&P 500 added 33.21 points to 7,674.37, while the Dow Jones Industrial Average surged 517.80 points to finish at 53,277.01.

The Nasdaq Composite rose 113.29 points to 26,180.45, and the Russell 2000 gained 25.44 points to reach 3,017.87. The advances showed that investors were willing to buy equities and defensive metals simultaneously as questions about inflation, federal finances and monetary policy remained unresolved.

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European markets joined the rebound, with the STOXX 600 advancing 0.59 percent to 654.18. Basic resources jumped 2.5 percent as the softer dollar strengthened demand for gold, miners and other commodity related shares.

The latest market positioning reflects a widening divide between resilient economic activity and growing unease about the dollar and federal fiscal conditions. The U.S. flash composite purchasing managers index rose to 56.0 in August, its strongest result in more than four years.

Services led the expansion with a reading of 56.8, while manufacturing slipped to a five month low of 53.2. The figures suggested that the economy remains active, but they did little to restore confidence in the dollar or settle the debate over the Federal Reserve’s next move.

Treasury yields remained elevated, with the 10 year yield hovering near 4.7 percent and the 30 year yield near 5.3 percent. Investors largely looked past the Treasury Department’s plan to repurchase longer dated debt, leaving sustained pressure on the far end of the yield curve.

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Federal Reserve minutes showed that several officials remain willing to raise interest rates if inflation fails to cool. Even so, market pricing continues to favor unchanged rates in September, reducing the immediate threat of another tightening move.

Gold has preserved its breakout because the dollar index fell below 99.00 while fiscal concerns stayed at the center of market attention. The next major signals are expected from the July personal consumption expenditures inflation report and Federal Reserve Chair Kevin Warsh’s remarks at Jackson Hole.

Precious metals delivered one of the strongest moves across major asset classes. Gold reached an intraday high of $4,632.90, cleared its $4,595 technical objective and remained above the region of its 200 day moving average.

Silver climbed as high as $70.14 before retreating toward $69. During the week, the metal broke through $66.55, $68.02 and $69.48, bringing the $71.00 to $72.08 range into sharper focus for bullish traders.

The advance has both monetary and physical foundations. The Treasury repurchase announcement helped trigger a reversal in rates and the dollar, while silver’s industrial demand and supply deficit story allowed it to outperform gold into the close.

The Strait of Hormuz remains the leading geopolitical channel affecting oil, inflation expectations and demand for defensive assets. Peace talks between the United States and Iran remain stalled, Washington is preparing tougher sanctions against Tehran and commercial traffic through the strait remains far below levels seen before the war.

Oil prices stayed elevated, although Nymex West Texas Intermediate crude moved lower to around $84.34 a barrel while Brent traded near $93.29. Restricted Gulf shipping and a weaker dollar support gold demand, but expensive crude oil keeps inflation risks alive and makes a decisive decline in Treasury yields more difficult.

For gold bulls, the next objective is a sustained move above resistance at $4,653.25, which could open the door to $4,852.91. Initial support stands at $4,453.59, followed by $4,382.83 and $4,253.93 if sellers regain control.

Silver bulls must reclaim $70.14 before targeting $71.56 and then $72.08. Bears need a break below $66.29 to expose deeper support at $64.20 and $62.75, but the weaker dollar, geopolitical risk and persistent supply concerns continue to give precious metals buyers the stronger hand.

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.