Dollar Weakness Boosts Gold and Silver Despite Higher Oil Prices

A weaker US dollar and safe-haven demand tied to the US-Iran conflict drove up gold and silver prices on Wednesday, despite higher Treasury yields and a surge in crude oil. At the time of writing, spot gold was trading near $4,396.40 an ounce, up 0.96%, while spot silver was trading at $67.080, up 2.20%.

The market is waiting for this week's inflation data, particularly Thursday's PPI and Friday's CPI, to confirm or reverse the roughly 60% probability of a Fed rate hike at the September 15-16 meeting. Gold's recent support has come from dollar weakness, geopolitical demand, and Treasury buyback volatility.

The Strait of Hormuz remains a key geopolitical channel into oil, inflation expectations, and defensive demand. Iran said it attacked 10 vessels near the strait after the US sank five Iranian tankers, while the US denied damage to its warships.