(Kitco NewsWire) – Spot gold prices are sharply higher and spot silver prices are also solidly higher in early U.S. trading Friday, as a softer U.S. dollar, easing Treasury yields and a pullback in oil prices helped metals recover from this week’s rate- and energy-driven selloff. At the time of writing, spot gold was trading near $4,184.80 an ounce, up 1.27% on the session, while spot silver was trading near $60.440, up 2.32%.
Market positioning remains less hawkish for October but still exposed to December tightening risk. Initial jobless claims fell to 197,000 last week, while continuing claims rose to 1.716 million, reinforcing a low-layoff, slow-hiring labor market after September payrolls rose by only 29,000 and July and August payrolls were revised down by a combined 60,000. Fed minutes released Wednesday showed most policymakers still expected another rate increase by year-end, and Friday pricing put the probability of an October hike near 17% to 19%, while December hike odds remained near 82% to 83%. The 10-year Treasury yield was near 5.25% after Thursday’s strong 30-year auction eased pressure at the long end.
Friday’s preliminary October consumer sentiment and inflation-expectations data are the next immediate test, followed by September CPI and PPI next week. Softer sentiment or inflation expectations would support gold by validating the payroll slowdown and lower-yield move; sticky expectations or a hot CPI print would keep the December hike channel active against bullion.
The Strait of Hormuz and U.S.-Iran situation remains a supply-risk overhang, but the immediate market impact turned less inflationary Friday. Oil prices retreated after President Donald Trump said the U.S. would not attack Iran before the Nov. 3 midterm elections and that talks were productive, reducing the near-term strike premium that had pushed Brent above $104. Threats to Gulf and Hormuz shipping have still increased in October, and the strait carried shipments equal to about 20% of global oil and fuel before the war. Iran is reviewing a U.S. response to a seven-day reopening proposal, while Washington added sanctions on 17 vessels tied to Iranian crude, oil products and petrochemicals. Lower oil helped gold through softer inflation expectations, lower yields and a weaker dollar, while also supporting silver’s risk-sensitive industrial channel.
Global risk tone improved before the U.S. open. S&P 500 futures were up 0.4%, Dow futures were up 0.1% and Nasdaq futures were up 0.7%, as lower oil and calmer yields offset Thursday’s technology-led decline. European equities were higher, with the DAX up 1.0%, the CAC 40 up 0.6% and the FTSE 100 up 0.9%, while Asian markets were mixed and South Korea and Taiwan were closed.
The key outside markets see Nymex WTI crude oil prices lower and trading near $90.41 a barrel, while Brent crude was near $102.58. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.25% area. The U.S. dollar index is softer. (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 $4,183.83 to $4,225.81 resistance zone, with a sustained move targeting $4,271.57 and then $4,311.17. Bears’ next near-term downside price objective is a break below $4,183.83, with deeper downside targets at $4,141.86 and then $4,103.24. First resistance is seen at $4,225.81 and then at $4,271.57. First support is seen at $4,183.83 and then at $4,141.86.
Spot silver bulls' next upside price objective is to drive prices back above the $61.720 to $63.060 area, with a move above that zone targeting $65.090 and then $72.000. 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 $61.720 and then at $63.060. Next support is seen at $59.960 and then at $58.940.
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