Dollar Weakness Sends Gold, Silver Prices Soaring Amid Fed Uncertainty
Gold and silver prices surged on Friday as the US dollar weakened, reducing the likelihood of a September Federal Reserve rate hike. Spot gold reached $4,594.60 per ounce, up 1.69%, while silver traded at $69.470, increasing by 2.23%. The dollar index dipped below 99.00, and long-end Treasury yields rose to around 5.25%.
The Fed's recent minutes indicated that some policymakers were open to tightening if inflation persists, but futures markets still favor a pause next month. This uncertainty has tempered market bets on another rate hike, despite Thursday's jobless claims and Philadelphia Fed index showing no notable deterioration in labor or regional factory activity.
Gold is leading cross-asset moves, breaking through the $4,447 support-turned-resistance level and challenging the $4,595 resistance zone. Silver has broken through $66.55 and $68.02, advancing toward the next hurdle at $69.48. The rally in metals is not merely driven by falling yields; they are climbing even with long-end rates elevated, pointing to fiscal-risk hedging, dollar softness, and geopolitical buying.
Geopolitical tensions in the Strait of Hormuz remain a key driver for oil prices and inflation expectations. U.S.-Iran negotiations have stalled, Washington has signaled stricter economic actions against Tehran, and commodity vessel traffic through the strait stays well below typical levels.