Gold tests $4,311 support as Fed-hike odds hold near 66%
NEW YORK (September 1) Spot gold and silver prices are sharply lower in late-afternoon U.S. trading Tuesday, as a surge in crude oil prices and a global bond selloff pushed Treasury yields higher and reinforced expectations that the Fed may still raise rates this month. At the time of writing, spot gold was trading near $4,327.70 an ounce, down 2.68%, while spot silver was trading at $63.950, down 3.71% on the session.
North American equity markets closed lower as higher oil prices and rising bond yields hit risk appetite. The S&P 500 fell 54.67 points, or 0.7%, to 7,631.47, the Dow Jones Industrial Average lost 419.02 points, or 0.8%, to 52,766.88, the Nasdaq Composite dropped 271.11 points, or 1.0%, to 26,099.77 and the Russell 2000 fell 36.32 points, or 1.2%, to 2,920.13. European markets also finished lower, with the STOXX Europe 600 down 0.56% to 647.46. London’s FTSE 100 fell 0.32% to 10,789.28, Germany’s DAX dropped 1.10% to 25,970.11, France’s CAC 40 lost 0.39% to 8,301.85 and Italy’s FTSE MIB declined 1.33% to 51,915.18.
The latest positioning remains anchored in the post-Jackson Hole rate repricing and the week’s labor-market calendar. July job openings rose slightly to 7.3 million, while the August ISM manufacturing index slipped to 54.6 from 55.6, a softer but still expansionary reading. The data were not weak enough to unwind the hawkish Fed trade. Markets continued to price roughly a 66% probability of a September rate hike, the two-year Treasury yield rose to 4.39% and the 10-year yield climbed to 4.79%. The next catalysts are Wednesday’s ADP employment report, Thursday’s jobless claims and ISM services data and Friday’s August nonfarm payrolls report. For gold, the setup is still rate-negative: a firm labor-market sequence would validate higher yields, while only a clear employment downside surprise would give bullion a cleaner relief path.
Precious metals traded as part of the broader yield shock. Gold sliced through its 20-day and 100-day moving averages, reached a nine-day low and tested the $4,329 to $4,311 support cluster highlighted in the latest technical work. Silver broke below $65.64, then fell through $64.67 as sellers extended the decline from last week’s $71.18 reversal top. The move leaves both metals dependent on whether Friday’s payrolls report cools the September-hike trade. Until then, the dollar and Treasury yields remain the dominant near-term inputs.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand, but Tuesday’s market impact came through inflation and rates rather than a gold-safe-haven bid. Another round of U.S. military strikes on Iran sent oil sharply higher, with Brent crude up 4.6% to $94.65 a barrel and U.S. crude up 5.2% to $90.22, its first close above $90 in more than a month. The war has essentially shut down the Strait of Hormuz, a waterway that normally handles about 20% of global oil shipments. For gold, the effect remains conflicted: geopolitical escalation supports defensive demand, but higher crude strengthens inflation pressure, lifts yields and raises the opportunity cost of holding non-yielding metals.
The key outside markets see Nymex WTI crude oil prices firmer and trading around $90.22 a barrel, while Brent crude was near $94.65. The yield on the benchmark 10-year U.S. Treasury note is trading near 4.79%. The U.S. dollar index is firmer. (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.)
Technically, spot gold bulls' next upside price objective is to push prices back above the $4,450.00 resistance level, with a sustained move targeting $4,532.00 and then $4,774.00. Bears' next near-term downside price objective is a break below $4,311.00, with deeper downside targets at $4,216.00 and then $4,203.00. First resistance is seen at $4,450.00 and then at $4,532.00. First support is seen at $4,329.00 and then at $4,311.00.
Spot silver bulls' next upside price objective is to drive prices back above $64.67, with a move above that level targeting $65.64 and then $66.87. The next downside price objective for the bears is a break below $62.98, with deeper downside targets at $61.51 and then $60.835. First resistance is seen at $64.67 and then at $65.64. Next support is seen at $62.98 and then at $61.51.
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