Gold slips below $4,600 as yields, dollar firm after PCE - Kitco PM Report

Spot gold and silver prices are lower in late-afternoon U.S. trading Wednesday, after hotter-than-expected PCE inflation lifted Treasury yields, firmed the U.S. dollar and forced profit-taking across precious metals ahead of Nvidia earnings and Friday’s Jackson Hole speech. At the time of writing, spot gold was trading near $4,591.70 an ounce, down 1.42%, while spot silver was trading at $68.000, down 0.78% on the session. North American equity markets finished near flat to slightly lower. The S&P 500 fell 1.58 points, or less than 0.1%, to 7,675.70, the Dow Jones Industrial Average lost 113.52 points, or 0.2%, to 53,463.88, the Nasdaq Composite slipped 21.10 points, or 0.1%, to 26,130.20, and the Russell 2000 fell 4.12 points, or 0.1%, to 3,005.90. European markets also finished little changed overall, with the STOXX Europe 600 down 0.01% to 656.41. London’s FTSE 100 fell 0.07% to 10,878.12, Germany’s DAX rose 0.08% to 26,285.96, France’s CAC 40 gained 0.27% to 8,462.39 and Italy’s FTSE MIB added 0.31% to 52,882.99. The latest positioning shifted against the lower-yields metals trade after the morning data stack. July PCE rose 0.2% on the month and 3.7% from a year earlier , above the 3.6% consensus year-over-year estimate, while core PCE rose 0.2% on the month and 3.3% year-over-year. Second-quarter GDP was unrevised at a 1.5% annualized pace, while July durable-goods orders rose 1.1% to $339.3 billion , above expectations. The data mix left the market less willing to extend the post-buyback bond rally: two-year yields moved above 4.22%, the 10-year yield settled above 4.66%, the dollar index rose and October Fed-hike odds moved above 50%. Gold’s failure to hold above the $4,630 to $4,650 resistance area shows the trade is now more sensitive to inflation surprises than to fiscal-risk hedging alone. The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand, but Wednesday’s market impact came through easing supply-risk premium rather than a fresh crude spike. Iran and Oman discussed a temporary arrangement to restore shipping through the strait, and oil extended a three-session decline on expectations that economic pressure, rather than renewed military escalation, could move the waterway closer to reopening. WTI settled at $82.23 a barrel, while Brent fell to $87.84. For gold, the setup remains conflicted: lower crude reduces the inflation impulse and safe-haven urgency tied to Gulf shipping, but the U.S.-Iran standoff is not resolved, leaving geopolitical demand in the background. The key outside markets see Nymex WTI crude oil prices lower and trading around $82.23 a barrel, while Brent crude was near $87.84. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area. The U.S. dollar index is firmer. Technically, spot gold bulls' next upside price objective is to push prices back above the $4,640.00 resistance level, with a sustained move targeting $4,673.00 and then $4,698.00. Bears' next near-term downside price objective is a break below $4,573.00, with deeper downside targets at $4,545.00 and then $4,500.00. First resistance is seen at $4,640.00 and then at $4,673.00. First support is seen at $4,573.00 and then at $4,545.00. Spot silver bulls' next upside price objective is to drive prices back above $68.20, with a move above that level targeting $69.50 and then $69.96. The next downside price objective for the bears is a break below $67.47, with deeper downside targets at $66.41 and then $65.67. First resistance is seen at $68.20 and then at $69.50. Next support is seen at $67.47 and then at $66.41.