Gold and Silver Retreat as Oil Spike Fuels Rate-Hike Expectations

Spot gold slipped 0.28% to trade near $4,392.60 an ounce, while silver retreated 0.47% to $65.740. The current market environment is dominated by the tension between safe-haven demand, sparked by energy infrastructure concerns in Saudi Arabia and regional conflict near the Strait of Hormuz, and the relentless rise in bond yields. The 10-year Treasury yield is hovering near 4.8%, a level that consistently challenges non-yielding assets like bullion.

Investors are now looking to Thursday’s Producer Price Index and Friday’s Consumer Price Index for a final read on inflation before the Fed’s September 15-16 meeting. While Goldman Sachs warns that a prolonged disruption in the Red Sea could push Brent crude above $120 a barrel, the immediate impact on metals remains negative. Higher oil prices are feeding inflation fears, which in turn strengthens the case for further monetary tightening. Technically, gold bulls must clear the $4,422 resistance level to regain momentum, while bears are eyeing $4,365 as a critical support floor.