Gold prices remain steady, silver prices weaken; U.S. Treasury yields offset the bullish boost from inflation data.

Fxstreet, July 17—— During Friday's (July 17) US session, spot gold edged higher while spot silver came under pressure and moved lower. Traders weighed this week's cooling inflation data, unexpectedly resilient US economic indicators, persistently high US Treasury yields, and renewed geopolitical risks in the Strait of Hormuz.

During Friday's (July 17) US session, spot gold edged higher while spot silver came under pressure and declined. Traders weighed this week's cooling inflation data, unexpectedly resilient US economic indicators, persistently high US Treasury yields, and renewed geopolitical risks in the Strait of Hormuz.

Spot gold traded around $3989.91 per ounce, up 0.34%; spot silver was quoted around $55.287, down 0.36% for the day.



Gold's early trading range was $3970.20-$4008.70. On Thursday, gold surged and then pulled back, still failing to reclaim the $4000 threshold but holding the intraday low of $3970.

Silver's early trading range was $54.65-$56.12. Although it held the $54.65 level, it has not managed to break through the short-term technical resistance range of $55.60-$57.52.

After the release of the latest significant US economic data, the positioning in the market provided less support for precious metals than did the initial bullish expectations upon the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) data.

In June, the US overall CPI fell 0.4% month-on-month, and final demand PPI declined 0.3% month-on-month; however, retail sales rose 0.2% month-on-month, initial jobless claims fell to 208,000, and the Philadelphia Fed Manufacturing Index jumped to 41.4.

The mixed data set weakened market bets for a Federal Reserve rate cut in July, but it is not enough for traders to conclude that the Fed is turning fully dovish.

Federal funds futures indicate about a 90% probability of keeping rates unchanged at the July 29 policy meeting. The 10-year Treasury yield hovered around 4.53%, the 2-year yield at 4.12%, and the US Dollar Index (DXY) traded in a narrow range around 100.80.

In short, cooling inflation provides a floor of support for gold, but resilient economic activity and high US Treasury yields continue to limit gold's upside.

The status of Hormuz Strait shipping can be summarized as restricted passage, heightened tensions, and ongoing military standoff, with the shipping market not having returned to normal.

The US expanded strikes on Iranian infrastructure in the Gulf, targeting ports and transport facilities; Iran in turn targeted facilities relevant to US allies in the region.

The conflict has not led to a complete blockade of the Strait and there is no authoritative confirmation, but the geopolitical risk premium has persisted in oil prices: Brent crude trades near $86, West Texas Intermediate (WTI) at $81.11.

This round of geopolitical tensions creates a dual effect for gold: geopolitical hedging demand is bullish for gold, but rising oil prices revive market inflation concerns, supporting higher US Treasury yields and weakening the upward momentum for safe-haven buying in gold.

In terms of major asset performances: oil remains strong; US Treasuries get buying support on Thursday's yield decline; the US dollar consolidates in a narrow range; silver underperforms gold notably.
Traders are currently focusing on three key variables: comments from Federal Reserve officials, subsequent market rate expectations after this week's inflation/retail/employment data releases, and whether Strait of Hormuz shipping faces further disruption.

If gold establishes itself above $4000, short-term downside pressure will ease; but if oil surges sharply again, the market will reassess whether energy inflation will offset the bullish effects brought by the declines in June's CPI and PPI.

External commodity markets: New York crude oil (WTI) remains strong, quoted near $80; Brent crude is around $86. The US Dollar Index steadies near 100.80, and the benchmark 10-year Treasury yield maintains around 4.53%.

After gold broke below a key level on Thursday, short-term bearish technicals dominate, with gold continuing to trade below the psychological $4000 barrier.

Bulls' primary upside target: reclaiming the $4000 threshold, stabilizing, and targeting $4008.70, with a further target of $4044.

Bears' short-term downside target: breaking below the $3970.20 support, with deeper targets at $3959 and $3942.

First resistance: $4000; next resistance: $4008.70.

First support: $3970.20; next support: $3959.



Silver continues to trade below $55.60, at the lower end of its recent breakdown range, with short-term technicals favoring the bears.

Bulls' primary upside target: returning above $55.60, breaking through to target $57.13, and further up to $57.52.

Bears' downside targets: breaking below $54.65 support, with deeper targets at $53.42 and the round number $50.

First resistance: $55.60; next resistance: $57.13.

First support: $54.65; next support: $53.42.