Gold, Silver Surge as Dollar Weakens Amid Fed Hike Uncertainty

On August 21, spot gold and spot silver prices surged during early U.S. trading hours. A weaker U.S. dollar and decreased market expectations for a Federal Reserve rate hike in September contributed to the increase. The spot gold price reached $4,582.14 per ounce, up 1.4% from the previous day, while spot silver hit $69.357, rising 1.88%. Market sentiment remains divided between bulls and bears, with some data indicating weakened U.S. economic growth and others showing elevated inflation risks.

The Federal Reserve meeting minutes revealed that officials are prepared to continue raising interest rates if inflation fails to subside. However, traders still lean towards the view that the Fed will hold rates steady next month. The yield on the U.S. 10-year Treasury note hovered around 4.7%, while the 30-year Treasury yield approached 5.25%. The U.S. Dollar Index fell below the 99.00 threshold.

The Strait of Hormuz remains a core geopolitical variable influencing crude oil, inflation expectations, and safe-haven buying. Negotiations between the United States and Iran have stalled, with Washington threatening stricter economic sanctions against Tehran. As a result, commodity vessel traffic through the strait is far below normal levels. Only seven commodity cargo ships passed through the Strait of Hormuz on Thursday, half the number from the previous day; multiple reports indicate that overall transit volume is only a fraction of pre-war levels.