Gold stalls below $4,000 as resilient U.S. data offsets inflation relief

The latest economic reports present a complex landscape for traders. Although headline CPI fell 0.4% and final-demand PPI dropped 0.3% in June, those figures were countered by a 0.2% rise in retail sales and a robust jump in the Philadelphia Fed manufacturing index to 41.4. This data mix has dampened expectations for an immediate dovish pivot from the Federal Reserve, with futures markets pricing in a 90% probability that rates will remain unchanged at the July 29 meeting. Consequently, the 10-year Treasury yield persists near 4.53%, placing a ceiling on non-yielding assets like precious metals.

Geopolitical friction in the Strait of Hormuz adds another layer of volatility. Ongoing military pressure and strikes on Iranian infrastructure have kept crude oil prices elevated, with Brent trading in the mid-$80s. While such instability typically bolsters gold's safe-haven appeal, the associated spike in energy costs fuels inflation concerns, keeping bond yields firm and limiting the metal's upside. Meanwhile, silver remains on the back foot, trading near $55.08 and failing to overcome key resistance levels. Traders are now closely monitoring Fed commentary and further developments in the Gulf to determine whether energy inflation will ultimately override the recent cooling in consumer and producer price indices.