(Kitco NewsWire) – Spot gold and silver prices are lower in early U.S. trading Wednesday, as a rebound in long-dated Treasury yields, firmer dollar tone and oil back above $100 a barrel offset the Fed-pause relief from last week’s weak employment report. At the time of writing, spot gold was trading near $4,123.10 an ounce, down 0.97% on the session, while spot silver was trading near $60.130, down 1.80%.
Market positioning remains split between weaker labor data and renewed inflation pressure. September nonfarm payrolls rose by only 29,000, the unemployment rate held at 4.2%, average hourly earnings rose 0.1% on the month and July and August payrolls were revised down by a combined 60,000 jobs. Monday’s September services data kept the inflation side of the trade alive, with the services PMI easing to 54.9 while the prices index rose to 74.0, its highest level since July 2022. Traders now see the Fed holding rates steady at the October 27-28 meeting as the base case, but December hike risk remains in the market as the 10-year Treasury yield trades near the 5.3% area and the 30-year yield moves back toward the 5.7% area.
The next tests are the $39 billion 10-year Treasury auction and September Fed minutes Wednesday, weekly jobless claims Thursday at 8:30 a.m. ET and preliminary October consumer sentiment Friday at 10:00 a.m. ET. Softer labor or sentiment data would support gold by validating the payroll slowdown; hawkish minutes, weak auction demand or firm inflation expectations would keep the yield channel pointed against bullion.
The Strait of Hormuz and U.S.-Iran situation remains a direct oil-market risk and an indirect headwind for gold through yields. Oil prices rose after fresh Houthi attacks on Saudi airports and military facilities, an attack on a tanker transiting Hormuz and storm risk in the U.S. Gulf of Mexico added to supply concerns. Middle East flows have recovered materially from the worst of the blockade, but crude shipments through Hormuz remain below prewar levels, tanker insurance and freight costs remain elevated and the U.S.-Iran diplomatic channel has not produced a durable reopening agreement. Brent crude traded near $101.88 a barrel, while WTI was near $89.99. The impact on bullion is mixed: the unresolved security risk supports defensive demand, but oil-led inflation pressure has lifted Treasury yields and the dollar, raising the opportunity cost of holding non-yielding metals.
Global risk tone softened before the U.S. open. Dow futures were down 178 points, or 0.34%, S&P 500 futures were down 11.25 points, or 0.14%, and Nasdaq 100 futures were down 129.25 points, or 0.41%, as investors reassessed the rates and energy backdrop after Tuesday’s record close for the S&P 500 and Nasdaq. European equities were lower, Asian markets were mostly weaker and chip shares led premarket losses as higher yields pressured long-duration growth trades.
The key outside markets see Nymex WTI crude oil prices higher and trading near $89.99 a barrel, while Brent crude was near $101.88. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.3% area. The U.S. dollar index is firmer. (Kitco Global Index shows how much of today’s gold move is the dollar versus the gold market itself.)
Technically, spot gold bulls’ next upside price objective is to push prices back above the $4,162.06 to $4,230.51 resistance zone, with a sustained move targeting $4,319.61 and then $4,331.64. Bears’ next near-term downside price objective is a break below $4,103.52, with deeper downside targets at $3,996.06 and then $3,942.10. First resistance is seen at $4,142.71 and then at $4,162.06. First support is seen at $4,114.97 and then at $4,103.52.
Spot silver bulls’ next upside price objective is to drive prices back above the $60.368 to $61.203 area, with a move above that zone targeting $61.756 and then the 50-day moving average near $64.070. The next downside price objective for the bears is a break below $59.850, with deeper downside targets at the $55.000 to $56.000 zone and then the broader $50.000 to $55.000 area. First resistance is seen at $60.368 and then at $61.203. Next support is seen at $59.850 and then at $55.000.
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