Gold Stalls as GDP Data and Middle East Tensions Weigh on Markets

The Federal Reserve’s decision to hold rates steady has failed to provide a clear direction for precious metals. While second-quarter GDP growth slowed to 1.5% and June PCE inflation eased to 3.7%, Chair Kevin Warsh signaled that the fight against inflation is far from over. This stance, coupled with three policymakers dissenting in favor of a rate hike, keeps the pressure on non-yielding assets. The 10-year Treasury yield, hovering near 4.7%, continues to act as a significant headwind for gold, offsetting the haven demand typically sparked by regional instability.

Simultaneously, the situation in the Strait of Hormuz remains a focal point for traders. Ongoing military activity and shipping disruptions have kept Brent crude near the low-$90s, forcing the market to price in a persistent energy risk premium. This environment creates a two-sided trade: geopolitical anxiety supports defensive buying, while the resulting energy inflation keeps bond yields high, capping potential gains for gold and silver. For now, market participants are closely monitoring upcoming jobless claims and further developments in Red Sea shipping lanes to gauge whether prices can breach current technical resistance levels.