Gold and silver ease as CPI risk steadies yields and the dollar - Kitco AM Report

Spot gold and silver prices are weaker in early U.S. trading Tuesday, as traders took profits after gold hit a two-month high overnight and markets moved back into inflation-watch mode ahead of Wednesday’s U.S. CPI report. At the time of writing, spot gold was trading near $4,386.30 an ounce, down 0.04%, while spot silver was trading at $65.090, down 0.78% on the session. The latest positioning remains a tug of war between weak labor data and renewed inflation risk. July payrolls fell by 23,000, and last week’s report pushed September Fed rate-hike odds into the low-40% area before oil’s latest rebound lifted that probability back to 51.9%. The 10-year Treasury yield is trading near 4.74%, close to its highest level since January 2025, while the dollar index is flat near 99.834. CPI is due Wednesday at 8:30 a.m. ET, with the market looking for annual inflation to ease to 3.4% from 3.5%. The Strait of Hormuz remains the key geopolitical input for metals and energy markets. Oil prices rose Monday after Iran tied any full reopening of the strait to U.S. concessions, while Washington added new compensation demands that complicated the path to a deal. Brent crude briefly traded above $90 a barrel Tuesday before easing, and U.S. crude held near the $82 area. The impact on gold is two-sided: Hormuz risk supports haven demand, but higher crude keeps inflation pressure alive and makes it harder for traders to fully price out another Fed hike. Middle East shipping risk also widened beyond the strait. A small cargo ship was attacked Tuesday in the Bab el-Mandeb Strait, with maritime security sources saying the vessel was believed to have been targeted in the Red Sea. Global markets were mixed. U.S. stock-index futures were little changed, with S&P 500 futures up 0.1%, Nasdaq futures up 0.3% and Dow futures down 0.1%. In Europe, France’s CAC 40 lost 0.1%, Germany’s DAX inched up 0.1% and the FTSE 100 was flat. In Asia, South Korea’s Kospi gained 0.7%, Hong Kong’s Hang Seng lost 1.1%, the Shanghai Composite fell 0.8% and Australia’s S&P/ASX 200 rose 0.2%. Tokyo was closed for a holiday. The key outside markets see Nymex WTI crude oil prices firmer and trading around $82.19 a barrel, while Brent crude was near $87.61. The U.S. dollar index is near steady. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.7% area. Technically, spot gold bulls' next upside price objective is to push prices back above the $4,430.00 to $4,492.00 resistance zone, with a sustained move targeting $4,500.00 and then $4,598.48. Bears' next near-term downside price objective is a break below $4,360.00, with deeper downside targets at $4,299.00 and then $4,224.00. First resistance is seen at $4,430.00 and then at $4,492.00. First support is seen at $4,360.00 and then at $4,299.00. Spot silver bulls' next upside price objective is to drive prices back above the $65.21 to $66.27 area, with a move above that zone targeting $67.60 and then $68.92. The next downside price objective for the bears is a break below $64.00, with deeper downside targets at $63.16 and then $61.64. First resistance is seen at $65.21 and then at $66.27. Next support is seen at $64.00 and then at $63.16.