Gold, silver fall as CPI, oil and dollar pressure metals
Spot gold prices are weaker and spot silver prices are sharply lower in early U.S. trading Tuesday, as a firmer U.S. dollar, higher Treasury yields and another jump in crude oil weighed against safe-haven demand tied to the U.S.-Iran conflict. At the time of writing, spot gold was trading near $4,693.10 an ounce, down 0.87%, while spot silver was trading at $83.450, down 2.94% on the session.
April CPI came in hotter than expected, with headline inflation rising 3.8% year over year versus expectations near 3.7%. The print keeps energy pass-through risk at the center of the rates trade after crude prices jumped again overnight.
The U.S.-Iran situation remains the main geopolitical input for metals, with the Strait of Hormuz still functioning as the market’s energy-risk shorthand. As of Tuesday morning, President Donald Trump’s rejection of Iran’s latest peace response has kept the cease-fire under pressure.
The dominant macro tension remains straightforward for bullion: geopolitical risk is still present, but the transmission into higher oil, firmer inflation expectations and higher nominal yields is limiting gold’s safe-haven bid. Silver is also seeing profit-taking after Monday’s outsized rally, when front-month Comex futures gained more than 6%.
Oil remained the main outside-market pressure point. Nymex WTI crude oil prices were higher and trading around $101.61 a barrel, while Brent crude was near $107.14. The U.S. dollar index is firmer. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.4% area.
The market focus for the rest of the session is the post-CPI rates reaction, the 10-year Treasury note auction at 1 p.m. ET, the monthly budget statement at 2 p.m. ET and weekly API crude oil inventories at 4:30 p.m. ET. Wednesday brings PPI at 8:30 a.m. ET and EIA crude inventories at 10:30 a.m. ET.
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,715 to $4,722 resistance zone, with a sustained move targeting the upper end of the blue descending channel. Bears’ next near-term downside price objective is a break below $4,686, with deeper downside targets at $4,652 and then the lower end of the multi-week descending channel. First resistance is seen at $4,715 and then at $4,722. First support is seen at $4,702.60 and then at $4,686.
Spot silver bulls’ next upside price objective is to drive prices back above the $84.70 area, with a move above that zone targeting $86.00 and then $87.26. The next downside price objective for the bears is a break below $82.50, with deeper downside targets at $82.12 and then the lower end of the ascending channel. First resistance is seen at $84.70 and then at $86.00. Next support is seen at $82.50 and then at $82.12.
