Spot gold and silver prices declined in early U.S. trading on Monday, with gold near $4,139.80 an ounce (down 0.82%) and silver at $61.660 (down 0.98%). The decline came as a firmer U.S. dollar and easing oil-risk premium offset support from softer U.S. labor data and lingering Middle East risk. Markets are trading in the aftermath of last month's FOMC meeting, where policymakers held the federal funds target range at 3.50% to 3.75% while maintaining an inflation-first bias. The June payrolls report showed nonfarm payrolls rose by 57,000, unemployment fell to 4.2%, and the labor force shrank by 720,000, pulling down near-term hike expectations ahead of Wednesday's 2 p.m. ET FOMC minutes release.
Fed Policy Expectations Shift After June Payrolls Data
The Federal Reserve held the federal funds target range at 3.50% to 3.75% at last month's FOMC meeting. The statement noted that inflation remained above the 2% target and that energy-related supply shocks were still feeding prices. Following the June payrolls miss, the July hike probability fell to roughly 22% from 31.5% before the jobs report, while September odds also eased. The dollar recovered modestly on Monday with DXY around 101.035 after recent losses.
Rhona O'Connell, head of market analysis, EMEA and Asia at StoneX, characterized the U.S. labor market as "a mixed bag." She noted that a softer payroll headline, lower unemployment and small-business hiring constraints left rates markets taking a more cautious view on additional U.S. tightening. O'Connell noted that swaps were pricing a 34% chance of a Q4 hike. The FOMC minutes are scheduled for release Wednesday at 2 p.m. ET.
Middle East Risk Premium Eases as Oil Supply Normalizes
Oil prices slipped on Monday after OPEC+ said seven members would raise output by 188,000 barrels per day in August. Brent was near $71.72 a barrel and WTI near $68.40 in early trade, well below wartime stress levels. Shipping activity through the Strait of Hormuz continued to recover, shifting the conflict from acute shock to managed risk.
Talks with Iran are on hold during funeral ceremonies for Ayatollah Ali Khamenei. Several vessels reportedly turned around over the weekend, and O'Connell noted that some tankers were moving through the strait while harassment and mine-risk warnings persisted. For gold, that leaves a background safe-haven bid but not a dominant driver.
Technical Analysis Shows Key Support and Resistance Levels
Spot gold bulls' next upside price objective is to push prices back above the $4,257.63 52-week moving average, with a sustained move targeting $4,416.82 and then $4,481.78. Bears' next near-term downside price objective is a break below $4,069.54, with deeper downside targets at $3,942.10 and then $3,886.46. First resistance is seen at $4,203.30 and then at $4,257.63. First support is seen at $4,130.70 and then at $4,069.54.
Spot silver bulls' next upside price objective is to drive prices back above the $63.47 52-week moving average, with a move above that zone targeting $89.38 and then the broader swing-chart reversal area. The next downside price objective for the bears is a break below $60.83, with deeper downside targets at $55.60 and then $45.55. First resistance is seen at $63.40 and then at $63.47. Next support is seen at $61.35 and then at $60.83.
Upcoming Economic Data and Fed Minutes Drive Market Focus
Traders are watching the S&P Global U.S. Services PMI at 9:45 a.m. ET, ISM Services PMI at 10 a.m. ET, global services PMI at 11 a.m. ET and Fed Governor Christopher Waller's 11 a.m. ET remarks in Rome. Global markets were mixed after the U.S. holiday weekend. S&P 500 futures rose 0.5% and Dow futures gained 0.1%, while European shares were modestly firmer and Asian markets were mixed. The U.S. dollar strengthened to 162.29 yen and the euro eased to $1.1419. The yield on the benchmark 10-year U.S. Treasury note was trading near the 4.5% area after slipping in Asian trade.
FAQ
What caused gold prices to decline on Monday?
Gold prices declined in early U.S. trading on Monday as a firmer U.S. dollar and easing oil-risk premium offset support from softer U.S. labor data and lingering Middle East risk. Spot gold was trading near $4,139.80 an ounce, down 0.82%.
What did the June payrolls report show?
The June payrolls report showed nonfarm payrolls rose by 57,000, the unemployment rate fell to 4.2%, and the labor force shrank by 720,000. Following the report, the July hike probability fell to roughly 22% from 31.5% before the jobs report.
When will the FOMC minutes be released?
The FOMC minutes are scheduled for release on Wednesday at 2 p.m. ET. The minutes will be read against the June payroll miss and the Fed's still-hawkish inflation language from last month's meeting where rates were held at 3.50% to 3.75%.
