Gold and Silver Prices Rise in Late U.S. Trading
Spot gold and silver prices saw significant gains in late U.S. trading on Friday. A weaker dollar earlier in the day, a retreat from the week’s extreme Treasury yields, and some bargain hunting helped the metals bounce back from a selloff earlier in the week. At that point, gold was trading just under $4,194.50 an ounce, up about 1.5%, while silver was around $60.700, climbing 2.77%.
In North America, equities closed higher, wrapping up a week of volatility with broader gains. The S&P 500 rose by 46.18 points, marking a 0.6% increase to close at 7,811.54. The Dow Jones Industrial Average was up 423.31 points, or 0.8%, to 51,654.95. Meanwhile, the Nasdaq Composite gained 172.83 points, also a 0.6% rise, finishing at 27,366.17. The Russell 2000 saw a modest increase as well, up 12.85 points, or 0.5%, to 2,806.98.
European markets followed suit with gains as fears of strikes in Iran eased, alongside firming metals prices and diminished bond-market worries, which bolstered risk appetite. The Stoxx Europe 600 index was up 0.97%. Germany’s DAX added 1.13% to reach 25,087.30, the U.K. FTSE 100 climbed 1.06% to 10,552.00, France’s CAC 40 rose 0.95% to 7,803.33, and Italy’s FTSE MIB increased by 0.91% to 49,746.30.
Market positioning appears less aggressive for October, but there are still concerns about a possible tightening in December. The preliminary October consumer sentiment index from the University of Michigan dropped to 46.3 from 48.1 in September. At the same time, one-year inflation expectations climbed to 4.7%, while long-run expectations increased to 3.5%. This backdrop has strengthened the argument for gold in light of economic slowdowns, yet inflation risks remain a consideration for the Federal Reserve. September payrolls showed only a 29,000 increase, with unemployment steady at 4.2%, and downward revisions for July and August totals amounting to 60,000 jobs. Traders are currently pricing in a roughly 19% chance of a rate hike in October, with an 84% likelihood of at least one 25-basis-point increase by December. The 10-year Treasury yield settled around 5.24%, and the dollar index hovered near 102.10.
The upcoming weeks will see significant economic indicators such as the September CPI on Wednesday, the September PPI on Thursday, and import and export prices on Friday. Softer inflation numbers would likely support gold prices by validating the payroll slowdowns, whereas a hotter CPI or PPI would maintain the risk of a December rate hike and put pressure on real rates.
Concerns around the U.S.-Iran situation and the Strait of Hormuz still loom large, despite a lull in near-term strike fears. After President Trump suggested U.S. discussions with Tehran were productive and that military action wouldn’t occur before the November 3 midterm elections, oil prices initially dipped. Iran is considering a U.S. proposal that could see the Strait reopened within a week. However, overall tensions remain high; shipping risks in the Gulf and Strait of Hormuz have intensified. Prior to the ongoing conflict, this vital waterway accounted for about 20% of global oil and fuel shipments. Additionally, U.S. sanctions on 17 vessels linked to Iranian energy and disruptions from Hurricane Isaias, which has curtailed over 1.3 million barrels per day of U.S. Gulf output, further complicate matters. As a result, Brent crude settled at $104.72 a barrel, rising 0.42%, while WTI closed at $91.85, up 0.39%. For gold, the outlook is mixed; while immediate strike risks have lessened some safe-haven demand, high crude prices and tight diesel supplies keep inflation expectations, yields, and demand for precious metals in play.
Currently, Nymex WTI crude oil prices are trending higher around $91.85 a barrel, with Brent crude nearing $104.72. The yield on the benchmark 10-year U.S. Treasury note is around 5.24%, and the U.S. dollar index remains stable at approximately 102.10.
Looking ahead technically, gold bulls are aiming to push prices above the resistance zone of $4,225.81 to $4,233.10, with a sustained move looking for targets of $4,272.41 and $4,319.60. On the flip side, bears are looking at breaking below $4,183.83, with deeper targets at $4,141.86 and $4,103.24. The first resistance for gold is observed at $4,225.81, with additional resistance at $4,230.51. First support is set at $4,183.83, followed by $4,141.86.
Silver’s bulls have their sights set on driving prices above the $61.720 to $63.060 range, with a move above that targeting $64.270 and then $65.090. For bearish traders, breaking below $59.960 is a goal, with deeper targets at $58.940 and $57.640. Initial resistance for silver is at $61.720 and then $63.060, while support levels are at $60.623 and then $59.960.
