Gold and Silver Rally as Dollar Slips Below 99

Market sentiment remains caught between signs of slowing domestic growth and persistent inflation risks tied to energy costs. While recent data on retail sales and consumer sentiment have dampened the appetite for aggressive interest rate hikes, bond yields remain elevated, with the 10-year Treasury near 4.7%. The divergence suggests investors are increasingly using metals as a hedge against fiscal instability and geopolitical friction rather than simply reacting to interest rate fluctuations.

Geopolitical tension, specifically surrounding the Strait of Hormuz, continues to complicate the inflation outlook. Commodity vessel traffic through the channel remains significantly suppressed, keeping oil prices volatile—Brent crude trades near $93.45 a barrel. This supply-side pressure provides a floor for inflation expectations, creating a complex environment where gold benefits from safe-haven demand while simultaneously facing headwinds from high long-end yields. Traders are now shifting their focus toward the upcoming flash U.S. PMI release to determine if the current momentum can hold.