Spot gold and silver climbed during early US trading hours on Thursday. Falling crude oil prices and a slight pullback in US Treasury yields helped precious metals stage a recovery after the Fed's first rate hike in three years. During US trading, spot gold kept rising and hit a daily high of $4381.38 per ounce, surging nearly $120 within the day.
(Source: FX168)
Spot silver rose more than 5%, touching a high of $66.138 per ounce.
(Source: FX168)
Market focus remains fixed on Wednesday’s Fed decision and interpretations of its subsequent policy path. The Fed raised the federal funds rate target range by 25 bASIs points to 3.75%-4.00%. The latest economic projections also pointed to a possible further rise to roughly 4.1% in the future. Fed Chair Kevin Warsh attributed the rate hike to still-elevated inflation, resilient domestic demand, and a labor market that has not deteriorated enough to justify pausing rate increases.
US initial jobless claims fell to 196,000, the lowest level since mid-July, reinforcing the view that layoffs remain rare. Meanwhile, the 2-year US Treasury yield retreated to around 4.72%, the 10-year US Treasury yield traded near 5.00%, and the US dollar weakened slightly. For gold, this set of signals is mixed: the higher rate path still acts as a headwind, but falling oil prices and lower yields have created room for a short-covering rebound.
Gold and Silver Rebound, Still a Technical Recovery
In trading terms, gold and silver are currently seeing a short-term corrective bounce rather than a confirmed trend reversal. Gold remains below the $4354 resistance level in the latest technical structure. Only a close above $4403 will markedly improve the chart pattern. Silver has climbed back above $64.40, but a break above $65.28 is needed to confirm a stronger recovery move.
The precious metals sector will stay highly sensitive to upcoming inflation and employment data, as the Fed under Warsh has adopted an explicitly data-dependent policy stance. In other words, if future price or labor market data continue to show resilience, market pricing for further tightening may heat up again, capping upside for gold and silver.
Falling Oil Prices Ease Inflation Pressure
Geopolitically, the Strait of Hormuz remains a critical channel affecting crude oil, inflation expectations and safe-haven demand. Although markets are watching faster recovery of Gulf infrastructure and Saudi efforts to restore key pipeline capacity, shipping through the Strait of Hormuz remains restricted, and Saudi pipeline disruptions have not been fully resolved.
Affected by this, international oil prices declined on Thursday. Brent crude fell to roughly $103.48 per barrel, while US WTI crude traded near $100.65 per barrel. For gold, this backdrop is a double-edged sword: lower oil prices help ease near-term inflation shocks and soften yield pressure, yet unresolved Gulf shipping risks continue to underpin some geopolitical safe-haven buying in the background.
Global Market Sentiment Improves Slightly
Ahead of the US opening bell, global markets leaned positive overall. S&P 500 futures rose 0.8%, Dow Jones Industrial Average futures gained 0.7%, and Nasdaq futures advanced 1.1%, showing equities attempting to recover from the post-Fed selloff on Wednesday. European markets also moved higher, led by banking and technology stocks, while ASIan markets were mixed.
This rebound mainly reflects temporary relief over falling oil prices and eASIng yields. However, the Fed’s hawkish guidance means risk appetite remains highly sensitive to any renewed rises in crude oil or long-end interest rates. A fresh climb in yields would likely resume pressure on non-yielding assets such as gold.
Key Technical Levels for Gold and Silver
Technically, the next target for spot gold bulls is to reclaim the $4354.00 resistance level. A sustained break would open subsequent targets at $4403.00 and $4433.00. The near-term bearish target is a drop below $4283.00, with further downside toward $4256.00 and $4217.00. Current primary resistance sits at $4354.00, followed by $4403.00; primary support is at $4283.00, then $4256.00.
For spot silver, bulls’ next objective is to break back above $65.28. A breach of this level would target $65.98 and $66.74 afterward. Bears aim for a decline below $64.40, with further targets at $63.45 and $62.57. Current primary resistance is $65.28, followed by $65.98; primary support stands at $64.40, then $63.45.
Overall, gold and silver benefit in the short run from falling US Treasury yields and lower oil prices, yet the policy path after the Fed rate hike remains restrictive. Subsequent performance will hinge on changes in inflation, employment and geopolitical risks.