Gold, silver prices rise as yields ease but December Fed risk remains - Kitco AM Report

(Kitco NewsWire) – Spot gold and silver prices are higher in early U.S. trading Tuesday, as long-dated Treasury yields eased from Monday’s multi-decade highs and oil fell below $100 a barrel, giving metals room to extend their post-payroll rebound. At the time of writing, spot gold was trading near $4,175.30 an ounce, up 0.86% on the session, while spot silver was trading near $61.470, up 0.87%.

Market positioning remains split between a weak labor signal and sticky inflation pressure. September nonfarm payrolls rose by just 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 services data kept the inflation side of the trade alive, with the ISM services PMI easing to 54.9 from 55.4 while the prices index rose to 74.0, its highest reading since July 2022. Fed funds pricing now puts the probability of no change at the October 28 meeting near 78%, but December still carries a high probability of at least one additional hike.

The 10-year Treasury yield was near the 5.27% area, the 30-year yield was near 5.63%, and the dollar index eased from Monday’s nearly 18-month high. Tuesday’s Fed speakers, Wednesday’s September Fed minutes, Thursday’s weekly jobless claims and Friday’s preliminary October consumer sentiment are the next rate-path tests. Softer labor or sentiment readings would support gold; firm price expectations or hawkish minutes would keep the yield channel pointed against bullion.

The Strait of Hormuz and U.S.-Iran situation remains unresolved, but the immediate oil-market pressure eased as regional exports recovered and emergency barrels moved toward the market. Middle East crude exports exceeded pre-war levels on four days in the final week of September, while the Group of Seven agreed to release 100 million barrels of crude and diesel from emergency reserves. Saudi Arabia also cut November Arab Light prices into Asia, signaling an improving supply picture. The risk premium has not disappeared: renewed tanker attacks around the Strait of Hormuz, Houthi strikes on Saudi targets and damage to Gulf infrastructure kept traders alert to another supply shock. Lower crude reduces the near-term inflation impulse behind yields and the dollar, which is positive for gold at the margin, but continued Gulf security risk keeps a defensive bid under bullion and leaves energy volatility inside the Fed reaction function.

Global risk tone was firmer before the U.S. open. Dow e-minis were up 281 points, or 0.55%, S&P 500 e-minis were up 30.75 points, or 0.39%, and Nasdaq 100 e-minis were up 192 points, or 0.61%, with AI-linked technology shares again leading the move. European equities were higher, with the Stoxx 600 up about 0.7%, while Japan’s Nikkei 225 gained about 1.05%. Lower oil and slightly cooler yields helped equities, although the bond market remains the main cross-asset constraint.

The key outside markets see Nymex WTI crude oil prices lower and trading below $89.00 a barrel, while Brent crude was near $98.35. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.3% area. The U.S. dollar index is softer but still elevated. (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 $4,203.61 to $4,230.51 resistance zone, with a sustained move targeting $4,319.61 and then $4,330.43. 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 $4,203.61 and then at $4,230.51. First support is seen at $4,164.44 and then at $4,103.52.

Spot silver bulls' next upside price objective is to drive prices back above the $61.744 to $63.060 area, with a move above that zone targeting $65.090 and then the psychologically important $66.000 area. The next downside price objective for the bears is a break below $59.960, with deeper downside targets at $58.940 and then $57.640. First resistance is seen at $61.744 and then at $63.060. Next support is seen at $60.715 and then at $59.960.

See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.

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goldsilverSeptember nonfarm payrollsAi-assisted-contentNymex WTI crude oil prices10-year U.S. TreasuryKitco Global IndexU.S. dollar indexStrait of HormuzMiddle EastISM services PMIS&P 500NASDAQ 100Japan’s Nikkei 225STOXX 600

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