Spot gold traded at $4,136.70 an ounce, up 0.31%, finding support as the 10-year Treasury yield eased to 5.1%. Despite this, the broader market remains dominated by persistent expectations of further Federal Reserve tightening. Futures markets currently suggest a 94% probability of a rate hike by December, a factor that continues to cap gold’s upside potential even as energy supply concerns mount.

Silver struggled to maintain its momentum, dropping 0.64% to $57.510. The metal’s industrial exposure leaves it vulnerable to signs of economic cooling, contrasting with gold’s defensive appeal. The volatility is exacerbated by the situation in the Strait of Hormuz, where ongoing attacks on commercial shipping have disrupted energy flows and kept oil prices elevated. Iranian officials have dampened hopes for a near-term diplomatic breakthrough, ensuring that regional security remains a primary driver for global commodity prices.

Investors are now turning their attention to upcoming economic data, including U.S. petroleum inventories and manufacturing indexes. Softer employment or business activity reports could signal a shift in the Fed’s trajectory, potentially providing a tailwind for bullion. Conversely, if inflation expectations remain rooted, the pressure from higher interest rates will likely persist, leaving both gold and silver caught between the threat of a slowing economy and the reality of a hawkish central bank.