Gold softens, silver firms as CPI week tests Fed repricing – Kitco AM Report

(Kitco NewsWire) – Spot gold prices are modestly lower and spot silver prices are firmer in early U.S. trading Monday, as the market consolidates Friday’s payroll-led precious-metals rally ahead of this week’s U.S. inflation data. At the time of writing, spot gold was trading near $4,329.20 an ounce, down 0.28%, while spot silver was trading at $63.800, up 0.55% on the session.

The latest positioning remains centered on last week’s U.S. labor-market shock. July nonfarm payrolls fell by 23,000, the unemployment rate was 4.1% and prior months were revised lower by a combined 103,000 jobs. The print cut the market-implied probability of a September Fed rate hike to about 44%, down from roughly two-thirds a week earlier, while Treasury yields fell Friday and the U.S. dollar gave back ground. Monday’s trade is more guarded: the dollar is firmer, Treasury yields are edging back toward the 4.6% area and traders are waiting for CPI Wednesday at 8:30 a.m. ET, PPI Thursday at 8:30 a.m. ET and retail sales Friday at 8:30 a.m. ET.

The Strait of Hormuz remains the main geopolitical input for oil, inflation expectations and safe-haven demand. Iran is insisting the U.S. meet conditions before the waterway fully reopens, including lifting the blockade, paying compensation, easing sanctions and releasing frozen assets. Oman-Iran talks over transit through the strait are continuing, but Tehran has said any full reopening depends on U.S. talks. The result is a two-way market impact for gold: higher oil and renewed shipping risk support defensive demand, but a sustained crude rebound also risks rebuilding the inflation case that would keep the Fed hawkish.

Global markets were mixed overnight. Japan’s Nikkei 225 rose 2.1%, Hong Kong’s Hang Seng gained 1.1% and Germany’s DAX added 0.3%, while France’s CAC 40 edged lower and the U.K.’s FTSE 100 slipped 0.3%. U.S. stock-index futures were little changed after the S&P 500 closed Friday at 7,757.64, a record high.

The key outside markets see Nymex WTI crude oil prices firmer and trading around $78.72 a barrel, while Brent crude was near $84.23. The U.S. dollar index (Kitco Global Index shows how much of today’s gold move is the dollar versus the gold market itself) is firmer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.6% area.

Technically, spot gold bulls’ next upside price objective is to push prices back above the 52-week moving average at $4,349.82 and resistance at $4,368.00, with a sustained move targeting $4,430.00 and then $4,481.78. Bears’ next near-term downside price objective is a break below $4,299.00, with deeper downside targets at $4,223.00 and then $4,147.00. First resistance is seen at $4,349.82 and then at $4,368.00. First support is seen at $4,299.00 and then at $4,223.00.

Spot silver bulls’ next upside price objective is to drive prices back above the $65.21 area, with a move above that zone targeting $67.00. The next downside price objective for the bears is a break below $63.10, with deeper downside targets at $61.16 and then $59.94. First resistance is seen at $65.21 and then at $67.00. Next support is seen at $63.10 and then at $61.16.

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