Gold and silver prices are lower in early U.S. trading Tuesday, with pressure coming from keener uncertainty heading into today’s FOMC meeting of the Federal Reserve. The marketplace is placing around or just above 30% odds the Fed might raise U.S. interest rates due to inflation concerns. A firmer U.S. dollar index is also working in favor of the precious metals markets bears early today. August gold was last down $47.20 at $4,030.20. September silver prices were last down $1.192 at $57.51.
The Federal Reserve’s Open Market Committee (FOMC) meeting begins this morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Kevin Warsh. There are lingering concerns the Fed could raise interest rates this week. Markets are currently pricing in an over one-third chance of a Fed rate increase on Wednesday, an unusually high level of uncertainty this close to a Fed meeting compared with recent years. Citadel Securities said it expects the Fed to raise rates this week to reinforce Chairman Kevin Warsh’s credibility in fighting inflation after the central bank chief repeatedly pledged to restore price stability.
U.S.-Iran tensions appear to be de-escalating; crude oil prices drop again. The U.S. and Iran extended their pause in hostilities Tuesday, with the focus turning to talks between Tehran and Oman over restarting shipping traffic in the Strait of Hormuz. “Omani officials hope to make an announcement signaling progress in the next few days, though there’s no guarantee that will happen, as discussions between Omani and Iranian negotiators are ongoing,” said a Bloomberg report. President Trump said there are currently “very deep talks” with Iran and suggested the negotiations involving Oman are the main track, and that Iran is talking because of the pressure caused by U.S. military strikes, said the report.
China continues to push back on unfair trade allegations. China has mounted a forceful defense of its booming exports, “rejecting Western claims of overcapacity as it braces for escalating trade friction with the U.S. and European Union,” said a Bloomberg report. China’s Ministry of Commerce published a 10,000-character position paper on Tuesday rejecting trading partners’ claims of excess factory production. It comes as Washington continues a probe into Chinese manufacturing, while Brussels faces an October deadline to address the bloc’s record trade imbalance with China. “Some economies have hyped up the so-called China excess-capacity issue,” Vice Commerce Minister Yan Dong said at a briefing in Beijing. The paper was intended to “set the record straight,” he said, and as reported by Bloomberg. “The document amounts to Beijing’s most comprehensive rebuttal yet of an argument increasingly driving Western trade policy: that China’s combination of state support, weak domestic demand and continued factory investment is pushing surplus goods onto global markets and threatening producers elsewhere,” said the report. Meantime, U.S. customs officials have carried out spot inspections on China-linked factories in Vietnam to determine how much value was added before exporting to the U.S. and potential software intellectual property violations, said Bloomberg.
Computer chip stocks melting down. A sell off in semiconductor stocks deepened overnight “as signs of progress in China’s advanced chipmaking compounded worries about the sustainability of the artificial intelligence spending boom,” said a Bloomberg report. U.S. technology-heavy Nasdaq 100 futures fell 0.6%, while in Asia, a 7.5% slump put a Bloomberg gauge of semiconductor shares on course for its biggest decline since April 2025. The MSCI World Semiconductor index has plunged 13% this month to track its worst performance since 2022, although it remains about 33% higher for the year. “When one trade becomes this crowded, investors don’t wait for bad news, they simply need a reason to take profits,” said Violeta Todorova, senior research analyst at Leverage Shares, said the Bloomberg report.
The key outside markets today see the U.S. dollar index slightly higher. September Nymex WTI crude oil prices are lower and trading around $81.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.62%.
August gold futures see a price downtrend on the daily bar chart that has stalled out. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $4,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $3,955.40. First resistance is seen at $4,050.00 and then at the overnight high of $4,085.70. First support is seen at $4,000.00 and then at $3,955.40. Wyckoff's Market Rating: 3.0
September silver futures also see a price downtrend on the daily bar chart stalled out. The next upside price objective for the bulls is closing prices above solid technical resistance at $65.00. The next downside price objective for the bears is closing prices below solid support at $50.00. First resistance is seen at $60.00 and then at last week’s high of $61.27. Next support is seen at $57.00 and then at the July low of $55.00. Wyckoff's Market Rating: 2.5
