(Kitco NewsWire) - Spot gold prices were slightly higher and spot silver prices were weaker in late U.S. trading Tuesday, as lower Treasury yields and softer U.S. economic data supported gold while profit-taking weighed on silver after its recent advance. At the time of writing, spot gold was trading near $4,653.40 an ounce, up 0.05% on the session, while spot silver was trading at $68.470, down 0.53%.
U.S. data reinforced a late-session bid for duration but did not produce a clean bullish impulse for metals. The Conference Board’s consumer confidence index slipped to 89.4 in August from 90.2 in July, while its expectations index fell by 5.8 points to 68.2. New home sales fell 10.5% in July, against expectations for a much smaller contraction. The data pushed Treasury yields lower, with the 10-year yield down to 4.638%, the 30-year yield down to 5.174% and the two-year yield at 4.195%.
Market positioning remains caught between softer growth data and inflation risk. Rate futures still left a September hold as the base case, but kept a material hike tail in place ahead of July PCE inflation, and Friday’s Jackson Hole speech from Fed Chair Kevin Warsh. That mix helped bonds recover from last week’s selloff while limiting gold’s upside after a roughly 7% five-day run. Ole Hansen, head of commodity strategy at Saxo, said the weakness in gold appeared “primarily driven by profit-taking.”
The U.S. Treasury’s decision to double liquidity-support buybacks for longer-dated nominal coupon securities remains part of the gold trade. The Treasury said the maximum size of operations in the 10-year to 20-year and 20-year to 30-year sectors will rise from $2 billion to at least $4 billion per operation, effective Sept. 9 through Nov. 4. The move came as total U.S. public debt outstanding topped $40 trillion, with Treasury’s daily data showing $40.033 trillion outstanding on Aug. 21. The buyback plan has eased some long-end stress, but it has also intensified the fiscal-sustainability debate that has supported gold’s debasement-hedge bid.
North American equities closed higher as falling oil and lower yields supported risk appetite. The Dow Jones Industrial Average rose 160.24 points, or 0.30%, to 53,577.40. The S&P 500 gained 24.42 points, or 0.32%, to 7,677.28, while the Nasdaq Composite advanced 171.11 points, or 0.66%, to 26,151.30. Canada’s S&P/TSX Composite rose 0.66% to 36,957.63, supported by technology shares, bank earnings and miners.
European equities also closed mostly higher as weaker energy prices and reduced fear of immediate Middle East escalation improved sentiment. The pan-European Stoxx 600 rose 0.35%, Germany’s DAX gained 0.61%, the U.K.’s FTSE 100 added 0.29% and Switzerland’s SMI rose 0.54%. France’s CAC 40 was the exception, ending down 0.16%.
The Strait of Hormuz remains a contested geopolitical risk, but Tuesday’s market action showed a smaller immediate supply-shock premium than last week. Oil fell even as Washington expanded sanctions pressure on Iran and Tehran continued to restrict navigation through the strait. Reports of Pakistani and Omani mediation, including talks on reopening safe passage, helped cap the move in crude. Brent crude fell to the high-$80s area and WTI settled near $82.36 a barrel, while gold retained a fiscal and geopolitical bid but failed to hold the session’s approach toward $4,700.
The key outside markets see Nymex WTI crude oil prices lower and trading around $82.36 a barrel, while Brent crude was near $87.27. The U.S. dollar index was 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 $4,657.73 to $4,692.00 resistance zone, with a sustained move targeting $4,770 and then $4,900. Bears’ next near-term downside price objective is a break below $4,610.99, with deeper downside targets at $4,597.90 and then $4,577.95. First resistance is seen at $4,657.73 and then at $4,692.00. First support is seen at $4,610.99 and then at $4,597.90.
Spot silver bulls’ next upside price objective is to drive prices back above the $69.59 to $70.38 area, with a move above that zone targeting $72.00 and then $90.00. The next downside price objective for the bears is a break below $69.02, with deeper downside targets at $68.67 and then at $68.10. First resistance is seen at $69.59 and then at $70.38. Next support is seen at $69.02 and then at $68.67.
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