Gold prices registered gains of 0.58% as geopolitical tensions eased following Washington's pause in attacks on Tehran, and US President Donald Trump indicated openness to renewed negotiations with Iran. This, combined with falling US Treasury yields, supported bullion prices, with XAU/USD approaching $4,070 before retreating near $4,050, suggesting potential for further downside. The US 10-year Treasury note yield fell 3.5 basis points to 4.645% [1]. Oil prices also dropped 6% to a one-week low as hopes for a diplomatic solution in the Strait of Hormuz increased [1]. In June, China's net gold imports through Hong Kong more than doubled year-on-year but were down over 5% from May [1].
Silver (XAG/USD) reversed part of its earlier gains on Monday, trading around $58.34, up 0.37% on the day, after briefly climbing above $60 during the Asian session. Silver has remained within a $55-$62 range in recent weeks, with hawkish Federal Reserve expectations limiting upside. Technical analysis shows a bearish bias, with buyers struggling near the 21-day SMA at $58.75 and momentum indicators suggesting selling pressure is easing but not reversing [2].
Both articles highlight the upcoming Federal Reserve monetary policy decision on Wednesday as a key market catalyst. Money markets price in a 60% chance the Fed will keep rates unchanged and a 40% chance of a 25-basis-point hike, according to Prime Terminal data [1]. The CME FedWatch Tool shows traders pricing in a 35% chance of an immediate increase [2]. A surprise rate hike would likely be bearish for silver, strengthening the US Dollar and pushing yields higher, while a dovish hold could support a recovery above $62 [2]. For gold, consolidation is expected, with bullish momentum requiring a break above $4,100 and the July 22 daily high at $4,165 [1].
Market participants are also watching Thursday's US economic releases, including GDP figures for Q2, the final print of the Fed’s preferred inflation gauge (Core PCE Price Index), and Initial Jobless Claims [1].
CONCLUSION
Gold and silver prices have responded positively to easing US-Iran tensions and lower US Treasury yields, but remain sensitive to the upcoming Federal Reserve decision. While technical indicators suggest stabilization, the Fed's policy stance will likely determine the next directional move for both metals. Traders should monitor Wednesday's Fed announcement and Thursday's US economic data for further market cues.