Gold, Silver Prices Plummet as Stronger Dollar and Elevated Yields Weigh on Market

The precious metals market saw gold and silver prices drop in late-afternoon U.S. trading on Friday, July 31st. The decline was attributed to a stronger dollar, elevated Treasury yields, and rising oil prices, which outweighed support from Thursday's softer PCE inflation data.

Spot gold was trading near $4,050.70 an ounce, down 1.27%, while spot silver was trading near $57.75, down 1.93% on the session. Gold's session range was between $4,018.20 and $4,112.80, leaving the metal above the $4,000 area but below Thursday's $4,101 breakout level.

The market positioning after Wednesday's FOMC decision, Thursday's GDP and PCE data, and Friday's sentiment report remains two-sided, still restrictive for metals. The Fed held rates steady in the 3.50% to 3.75% range by a 9-3 vote, with three officials favoring a 25-basis-point hike.

The Strait of Hormuz situation is best characterized as open but highly stressed transit under active military, shipping, and diplomatic pressure. Oil prices rose more than 1% Friday and logged their strongest month since March as the Iran war continued to disrupt key shipping routes.