Gold Pulls Back While Silver Eyes Breakout

The precious metals market showed a clear divergence in late U.S. trading on Wednesday, as gold came under pressure from stronger-than-expected inflation data, while silver held firm and approached the key $90 level. Spot gold declined by 0.58% to trade near $4,687 per ounce, whereas spot silver gained 1.09%, reaching approximately $87.66. This contrasting performance comes as markets navigate conflicting forces—geopolitical tensions and persistent inflation pressures.

The main driver behind gold’s weakness was the release of the U.S. Producer Price Index (PPI) for April, which exceeded expectations and dampened hopes for near-term rate cuts. The index rose by 1.4% on a monthly basis, marking the largest increase since 2022, while the annual rate climbed to 6.0%. Energy prices played a significant role in this surge, with a 7.8% jump overall and a sharp 15.6% rise in gasoline. This followed the previous day’s CPI report, which also showed elevated consumer inflation, further challenging expectations for a more accommodative monetary policy.

At the same time, geopolitical tensions between the United States and Iran continue to act as a supportive factor for gold. Disruptions in the Strait of Hormuz—through which roughly a quarter of global seaborne oil trade passes—have reduced oil flows and driven energy prices higher. While this situation boosts safe-haven demand for gold, it simultaneously fuels inflation expectations, strengthens the U.S. dollar, and pushes Treasury yields higher (around the 4.5% level), all of which weigh on gold prices.

In contrast, silver has demonstrated stronger performance, supported by industrial demand and its relative value compared to gold. The metal traded within a wide range of $82.71 to $89.47 during the session, keeping the $90 level firmly in sight. The ongoing compression of the gold-silver ratio reflects growing investor interest in silver as an alternative play within the metals space.

From a technical perspective, gold needs to break above the $4,774–$4,792 resistance zone to regain bullish momentum, with potential upside targets at $4,891 and $5,024. On the downside, a break below $4,638 could open the door to further declines toward $4,550. Meanwhile, silver could target the $95–$100 range if it successfully breaks above $90, although a drop below the $85 support zone may trigger a deeper correction. As markets continue to digest inflation data alongside geopolitical risks, the outlook for precious metals remains highly complex and volatile.