Gold and Silver Retreat as Dollar Gains Diminish Rate-Cut Hopes

The cooling of the precious metals rally follows Thursday’s post-PCE rebound, with gold failing to maintain its breakout level of $4,101. Investors remain cautious following a split Federal Reserve decision, where three officials dissented in favor of a 25-basis-point hike, keeping the possibility of a September increase on the table. While second-quarter GDP growth slowed to 1.5% and inflation metrics showed signs of easing, the 10-year Treasury yield hovered near 4.67%, creating a difficult environment for non-yielding bullion.

Energy markets are exacerbating these headwinds. Continued disruptions in the Strait of Hormuz and Red Sea shipping routes have kept oil prices elevated, with WTI crude trading near $85.46. Although such geopolitical friction typically triggers defensive buying, the resulting inflationary pressure keeps interest rate expectations high, effectively capping gains for gold and silver. Technically, both metals are currently struggling below their 50-period and 100-period moving averages, handing the near-term advantage to bears as they eye further support levels at $4,028.40 for gold and $56.88 for silver.