(Kitco NewsWire) - Spot gold and silver prices settled lower in late-afternoon U.S. trading Tuesday, as elevated crude oil prices, a firmer U.S. dollar and a 10-year Treasury yield near 5% kept pressure on non-yielding metals ahead of Wednesday’s Federal Reserve decision. Front-month Comex gold settled at $4,291.60 an ounce, down 0.43%, while front-month silver settled at $63.236 an ounce, down 0.4%.
North American equity markets closed lower as oil and yields weighed on risk appetite. The S&P 500 fell 34.25 points, or 0.4%, to 7,585.73, the Dow Jones Industrial Average dropped 328.09 points, or 0.6%, to 52,093.11, the Nasdaq Composite lost 204.84 points, or 0.8%, to 25,981.57, and the Russell 2000 fell 21.95 points, or 0.8%, to 2,870.29. European markets also finished in the red, with the STOXX Europe 600 down 0.28% to 634.18. London’s FTSE 100 fell 0.37% to 10,658.13, Germany’s DAX lost 0.15% to 25,402.28, France’s CAC 40 declined 0.34% to 8,090.28, and Italy’s FTSE MIB slipped 0.14% to 51,555.19.
The latest positioning remains dominated by last week’s CPI and PPI prints, the oil shock and Wednesday’s Fed decision. Futures markets are pricing a roughly 90% probability of a 25-basis-point hike, a sharp shift from one week ago, while the 10-year Treasury yield briefly touched 5.04% overnight before ending near 5.00%. The expected hike itself is now largely discounted. The market risk is the guidance: if Chair Kevin Warsh signals that this week’s move begins a broader tightening cycle, gold faces another real-yield headwind; if he frames the hike as insurance against oil-driven inflation, bullion could stabilize on reduced terminal-rate risk. The Fed’s updated rate projections will matter as much as the statement.
Precious metals traded defensively because the rates channel remained in control. Gold settled at a six-week low and stayed below the $4,316 to $4,355 resistance band highlighted in the latest technical setup. Silver also failed to reclaim its $63.76 short-term resistance area and remains vulnerable while trading below $64.51. Middle East risk is still providing background support, but the stronger dollar and 5% Treasury-yield backdrop are keeping rallies capped.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. The Saudi East-West Pipeline remains offline after attacks blamed on Iran-aligned fighters, while Saudi loadings at Yanbu were suspended and commodity-vessel traffic through Hormuz fell to four on Monday from 10 a day earlier. Brent crude settled at $108.75 a barrel, and Reuters-reported market pricing showed WTI above $106 intraday. For gold, the setup remains conflicted: Hormuz and pipeline disruptions support defensive demand, but crude above $100 raises inflation expectations, lifts yields and strengthens the Fed-hike case.
The key outside markets see Nymex WTI crude oil prices firmer and trading above $106 a barrel, while Brent crude settled near $108.75. The yield on the benchmark 10-year U.S. Treasury note is trading near 5.00%. 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 $4,316.00 resistance level, with a sustained move targeting $4,355.00 and then $4,402.00. Bears' next near-term downside price objective is a break below $4,283.00, with deeper downside targets at $4,252.00 and then $4,223.00. First resistance is seen at $4,316.00 and then at $4,355.00. First support is seen at $4,283.00 and then at $4,252.00.
Spot silver bulls’ next upside price objective is to drive prices back above $63.76, with a move above that level targeting $64.51 and then $65.28. The next downside price objective for the bears is a break below $62.34, with deeper downside targets at $61.60 and then $60.81. First resistance is seen at $63.76 and then at $64.51. Next support is seen at $62.34 and then at $61.60.
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