(Kitco NewsWire) – Spot gold and silver prices are solidly higher in early U.S. trading Thursday, rebounding from Wednesday's sharp losses as falling Treasury yields, a weaker U.S. dollar and renewed safe-haven demand outweighed another upside U.S. inflation surprise. A technology-led global equity selloff pushed investors toward government bonds and bullion, even as September producer prices rose much faster than expected. At the time of writing, spot gold was trading near $4,147.50 an ounce, up $43.00, or 1.05%, while spot silver was trading near $56.620, up $1.10, or 1.99%.
Market positioning remains caught between persistent inflation and growing concerns about the sustainability of the AI-driven equity rally. September producer prices surged 1.3% on the month and 6.3% from a year earlier, the largest monthly advance since March 2022. Producer energy prices jumped 10.8%, including a 20.3% increase in gasoline. The report followed Wednesday's stronger-than-expected CPI, which showed headline inflation rising 0.6% on the month and 3.7% annually. September retail sales increased 0.8%, exceeding forecasts, although sales excluding autos and gasoline rose just 0.2%. Initial jobless claims edged up to 199,000, reinforcing the picture of limited layoffs despite slower hiring.
Fed funds pricing put the probability of an October rate hike near 29% following the morning data, leaving a pause as the base case but keeping additional tightening by December heavily priced. The benchmark 10-year Treasury yield fell toward 5.08%, its lowest level in about three weeks, as selling in heavily indebted AI-linked technology companies fueled demand for Treasuries. The dollar index retreated toward 102.1 from Wednesday's 18-month high. The next tests include Friday's import and export prices, industrial production and Fed Chair Kevin Warsh's appearance at the IMF annual meetings in Bangkok. The sharp yield decline provides immediate support for gold, but persistent producer inflation and resilient consumer spending leave the Fed's tightening bias intact.
The Strait of Hormuz and U.S.-Iran situation remains a significant source of geopolitical and energy-market risk, although crude prices retreated Thursday. Washington is considering easing sanctions on certain oil tankers to lower shipping costs, while signs of recovering Middle Eastern exports have reduced some immediate supply concerns. The security picture remains volatile. A container ship and a dry bulk carrier sank near the strait following separate projectile attacks, and Tehran has indicated it is intensifying strikes in response to the U.S. blockade of Iranian ports. Brent crude fell toward $104.39 a barrel, while WTI traded near $92.91. Lower crude prices offer some relief from inflation pressure, but shipping disruptions, elevated freight costs and the unresolved U.S.-Iran confrontation continue to support defensive demand for gold. Silver is benefiting from the precious-metals rebound but remains more exposed to weakening industrial demand and broader risk-asset liquidation.
Global equity markets remained under pressure before the U.S. open. S&P 500 futures were down about 0.3%, Nasdaq futures fell 1.2% and Dow futures were modestly higher as concerns about AI-sector financing and stretched valuations extended Wednesday's technology selloff. South Korea's Kospi dropped about 7.6%, Japan's Nikkei 225 lost 4.9% and Taiwan's Taiex declined 3.4%. European equities were mixed, with defensive sectors outperforming technology shares. The flight toward government bonds provided the clearest cross-market support for gold.
The key outside markets see Nymex WTI crude oil prices lower and trading near $92.91 a barrel, while Brent crude was near $104.39. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.08% area. The U.S. dollar index is softer and trading near 102.1. (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 $4,161.46 to $4,181.44 resistance zone, with a sustained move targeting $4,216.96 and then $4,267.20. Bears' next near-term downside price objective is a break below $4,127.56, with deeper downside targets at $4,107.28 and then $4,088.10. First resistance is seen at $4,161.46 and then at $4,181.44. First support is seen at $4,127.56 and then at $4,107.28.
Spot silver bulls' next upside price objective is to drive prices back above the $56.340 to $56.920 area, with a move above that zone targeting $57.400 and then $57.860. The next downside price objective for the bears is a break below $55.410, with deeper downside targets at $54.850 and then $54.290. First resistance is seen at $56.920 and then at $57.400. Next support is seen at $55.410 and then at $54.850.
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