Gold broke below a key technical support cluster near $4,356 on Thursday as hotter-than-expected inflation data pushed Treasury yields and the U.S. dollar higher. A separate Reuters report casting doubt on expanded U.S. copper tariffs added to the pressure on precious metals, with the SPDR Gold Shares ETF slipping 1.2%.
Gold moved sharply lower after the U.S. Producer Price Index came in at 5.4%, above the 5.3% estimate. The core reading matched forecasts at 4.6%, though still above last month's 4.3%. Inflation remains well above the Federal Reserve's 2% target, and the hotter print reminded traders the Fed may need to hold monetary policy restrictive for longer.
Yields and the dollar climb
The report pushed the 10-year Treasury yield up 7.4 basis points to 4.911%, its highest level since late October 2023. The US dollar index gained 0.31% over the same stretch. Separately, the yield on 10-year Treasury Inflation-Protected Securities rose four basis points to 2.5%, its highest level since 2007, as a firmer dollar and $100 crude oil added further pressure on precious metals.
Gold does not pay interest, so rising yields raise the opportunity cost of holding it. A stronger dollar also makes gold pricier for buyers using other currencies, cutting into overseas demand. That relationship is a tendency, not a guarantee — gold has previously climbed alongside yields and the dollar when investors sought safety from geopolitical tension or financial-market stress.
Gold cracks below key support
The price fell below a cluster of technical support near $4,356 that included the 100-day moving average, an upward-sloping trendline and the 200-bar moving average on the four-hour chart. With price now trading below that zone, the former support becomes resistance, and sellers stay in control as long as gold remains under $4,356.
Traders are now watching the 50% midpoint of the move up from the late-June low, at $4,319.75, the next downside target, with the price reaching $4,324.16 so far during the session.
Copper tariff doubts weigh on metals
Copper and silver fell even harder than gold after a Reuters report indicated the White House had not moved forward with broader tariffs on refined copper. The SPDR Gold Shares ETF fell 1.2%, following a 0.9% gain on Wednesday. The iShares Silver Trust ETF tumbled 4.2%, reversing a 2.3% climb from the prior session.
Sellers keep the upper hand as long as gold's price holds beneath the $4,356 support-turned-resistance zone.
Sources: Investor's Business Daily, investingLive
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