Gold and silver prices declined sharply in early U.S. trading Tuesday, with spot gold trading near $4,116.80 an ounce, down 1.78%, and spot silver at $61.865, down 4.96%. The sell-off was driven by post-Fed rate positioning, a firmer dollar backdrop, and reduced energy-supply concerns that outweighed residual geopolitical demand. The Federal Reserve held its funds-rate target at 3.50% to 3.75% last week, but June projections shifted the 2026 median forecast to 3.8% from 3.4% in March, keeping markets focused on real yields and the dollar rather than pre-committed Fed guidance.
Federal Reserve Projects Higher 2026 Rates
The Federal Reserve maintained its funds-rate target at 3.50% to 3.75% last week. The June projections placed the 2026 median funds-rate forecast at 3.8%, up from 3.4% in March, while nine officials penciled in at least one 2026 rate hike. The shift keeps the market focused on real yields, the dollar, and incoming inflation data rather than on pre-committed Fed guidance, leaving gold exposed when risk markets do not need a hedge.
Strait of Hormuz Shipping Activity Remains Below Prewar Levels
Ship traffic in the Strait of Hormuz has increased since the interim deal, with 71 confirmed crossings between Friday and Sunday. This remains below the prewar pace of roughly 100 to 130 vessels a day, and the central route remains mined. Iran agreed to toll-free commercial passage for 60 days, while U.S. and Iranian officials are still disputing control, tolls, and future administration of the waterway. Crude oil prices are lower, with Nymex WTI crude trading around $73.58 a barrel and Brent crude near $77.47.
Global Equity Markets Decline as Risk Rally Cools
U.S. equity futures pointed lower before the open as an eight-day risk rally cooled. Dow futures were down 0.7% at 51,774.00, while S&P 500 futures fell 1.5% to 7,429.25. Japan's Nikkei 225 lost 3.6%, and South Korea's Kospi tumbled 10.0%. European bourses were lower in early trade. Neil Newman, head of strategy at Astris Advisory Japan, stated Tuesday that "now it has cooled off a bit." The U.S. dollar is mixed against major currencies, and the yield on the benchmark 10-year U.S. Treasury note remains in the mid-4% area.
May PCE Inflation Report Due Later This Week
The May PCE inflation report is scheduled for release later this week. In the current setup, a sticky core reading would reinforce the Fed's higher-for-longer signal and keep pressure on gold and silver, while a softer print would test whether lower oil can translate into lower real-rate expectations.
Technical Analysis Shows Key Resistance and Support Levels
For spot gold, bulls' next upside price objective is to push prices back above the $4,200 to $4,226 resistance zone, with a sustained move targeting $4,330 and then the $4,597 descending-channel high. Bears' next near-term downside price objective is a break below $4,119, with deeper downside targets at $4,073 and then $4,000. First resistance is seen at $4,200 and then at $4,226. First support is seen at $4,119 and then at $4,073.
For spot silver, bulls' next upside price objective is to drive prices back above the $66.00 to $66.57 resistance zone, with a move above that zone targeting the 50-hour moving average near $68.32 and then $69.84. The next downside price objective for the bears is a break below $61.54, with deeper downside targets at $60.00 and then $58.00. First resistance is seen at $66.00 and then at $66.57. Next support is seen at $61.54 and then at $60.00.
FAQ
What caused gold and silver prices to decline on Tuesday?
Gold and silver prices declined sharply in early U.S. trading Tuesday due to post-Fed rate positioning, a firmer dollar backdrop, and reduced energy-supply concerns. Spot gold traded near $4,116.80 an ounce, down 1.78%, while spot silver traded at $61.865, down 4.96%.
What did the Federal Reserve project for 2026 interest rates?
The Federal Reserve's June projections placed the 2026 median funds-rate forecast at 3.8%, up from 3.4% in March. Nine officials penciled in at least one 2026 rate hike, while the Fed held its current funds-rate target at 3.50% to 3.75% last week.
How many ships crossed the Strait of Hormuz between Friday and Sunday?
Ship traffic in the Strait of Hormuz recorded 71 confirmed crossings between Friday and Sunday. This remains below the prewar pace of roughly 100 to 130 vessels a day, and the central route remains mined. Iran agreed to toll-free commercial passage for 60 days.
