(Kitco NewsWire) - Spot gold prices were firmer and spot silver prices were lower in late U.S. trading Thursday, as a strong 30-year Treasury auction helped yields retreat from the morning highs, while oil’s surge kept inflation and year-end Fed tightening risk in the trade. At the time of writing, spot gold was trading near $4,132.30 an ounce, up 0.55% on the session, while spot silver was trading near $59.050, down 1.03%.
North American equities closed mixed as a late retreat in Treasury yields offset part of the pressure from higher oil and a technology-stock selloff. The S&P 500 fell 36.41 points, or 0.5%, to 7,765.36. The Dow Jones Industrial Average rose 51.77 points, or 0.1%, to 51,231.64. The Nasdaq Composite fell 345.35 points, or 1.3%, to 27,193.34, while the Russell 2000 rose 0.92 point, less than 0.1%, to 2,794.13.
European equities closed lower as the oil shock and renewed sovereign-yield pressure hit banks, autos and health care. The Stoxx Europe 600 fell 0.75% to 625.51. Germany’s DAX lost 1.18% to 24,806.97, France’s CAC 40 fell 0.51% to 7,729.69, the U.K. FTSE 100 declined 0.16% to 10,441.60 and Italy’s FTSE MIB dropped 1.35% to 49,297.88.
Market positioning remains less hawkish for October but still exposed to December tightening risk. Initial jobless claims fell to 197,000 last week, with continuing claims rising to 1.716 million, reinforcing a low-layoff, slow-hiring labor market after September payrolls rose by only 29,000. Fed minutes and Thursday’s comments from Gov. Christopher Waller kept the message focused on additional tightening later this year, even as traders continued to price a low probability of an October hike and a much higher probability of a December move. The $22 billion 30-year Treasury auction cleared at 5.618% with a 2.54 bid-to-cover ratio, helping the 30-year yield back away from the 5.7% area and pulling the 10-year yield toward the 5.2% area late in the session.
The next rate-path tests are preliminary October consumer sentiment Friday at 10:00 a.m. ET, September CPI Wednesday at 8:30 a.m. ET and September PPI Thursday at 8:30 a.m. ET. Softer inflation expectations or CPI would support gold by validating the payroll slowdown; another oil-driven rise in prices or weak long-end demand would keep the yield channel pointed against bullion.
The Strait of Hormuz and U.S.-Iran situation remains the main oil-market risk and the main indirect pressure point for metals through inflation and yields. A tanker off Qatar was struck by multiple projectiles, attacks on oil, LNG and LPG vessels around Hormuz reached the highest weekly level since the Iran war began and transit volumes through the chokepoint have fallen back from late-September recovery levels. Brent crude settled 4.1% higher at $104.28 a barrel, while WTI traded near $91.60, with Gulf of Mexico hurricane-related shut-ins adding to the supply shock. Higher crude normally supports gold through geopolitical demand, but Thursday’s dominant transmission was inflationary: oil lifted yields, pressured risk assets and weighed on silver’s industrial-demand channel, while bullion found support from safe-haven demand and the late-session Treasury-yield retreat.
The key outside markets see Nymex WTI crude oil prices higher and trading near $91.60 a barrel, while Brent crude settled near $104.28. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.2% 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 $4,142.00 to $4,163.15 resistance zone, with a sustained move targeting $4,184.00 and then $4,226.00. Bears’ next near-term downside price objective is a break below $4,103.00, with deeper downside targets at $4,067.00 and then $4,032.00. First resistance is seen at $4,142.00 and then at $4,163.15. First support is seen at $4,103.00 and then at $4,067.00.
Spot silver bulls’ next upside price objective is to drive prices back above the $59.960 to $61.190 area, with a move above that zone targeting $61.720 and then $63.060. The next downside price objective for the bears is a break below $58.940, with deeper downside targets at $58.681 and then $57.640. First resistance is seen at $59.960 and then at $60.091. Next support is seen at $58.940 and then at $58.681.
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