Gold and Silver Retreat as Rate Hike Bets and Oil Prices Mount

The S&P 500 and North American indices finished largely flat, reflecting a cautious sentiment across global markets. In Europe, the Stoxx Europe 600 dropped 0.55%, with the DAX and CAC 40 also posting losses as investors reacted to higher bond yields and concerns over energy costs. Market participants are increasingly betting on a Federal Reserve rate hike, with futures pricing a 70% probability for October following a string of robust economic reports, including a 6.4% rise in August new-home sales and a drop in weekly jobless claims to 197,000.

Geopolitical friction surrounding the Strait of Hormuz continues to provide a complex backdrop for bullion. While the instability typically fuels safe-haven demand, the resulting surge in crude oil prices—with Brent trading near $105.42 a barrel—has intensified inflationary pressures and bolstered the case for tighter monetary policy. Gold bulls are now looking for a recovery above the $4,311 resistance level, while bears eye a potential drop toward $4,252. Traders are now turning their attention to Friday’s durable goods orders and consumer sentiment data to determine if the recent downward trend in precious metals has reached a local floor.