(Kitco NewsWire) - Spot gold prices were lower and spot silver prices were slightly higher in late U.S. trading Monday, as a firmer U.S. dollar and rising Treasury yields pressured bullion while traders weighed persistent inflation risks against expectations for a Federal Reserve pause later this month. A rebound in technology stocks reduced some defensive demand for gold, while continued uncertainty surrounding the Strait of Hormuz limited selling pressure across precious metals. At the time of writing, spot gold was trading near $4,137.80 an ounce, down $26.30, or 0.63%, while spot silver was trading near $56.930, up $0.068, or 0.12%.
North American equities closed mixed as technology shares rebounded from last week's sharp selloff. The S&P 500 rose 31.29 points, or 0.4%, to 7,690.73. The Dow Jones Industrial Average fell 36.38 points, or 0.1%, to 51,966.03. The Nasdaq Composite gained 290.85 points, or 1.1%, to 26,430.89, while the Russell 2000 added 6.93 points, or 0.3%, to 2,728.30. Technology and semiconductor shares led the recovery as investors reassessed concerns about financing costs and capital spending associated with artificial intelligence infrastructure. In Canada, the S&P/TSX Composite fell 247.92 points, or 0.7%, to 35,928.63, weighed down by financial and metal-mining shares.
European equities finished sharply lower after weekend protests in France and Italy renewed concerns about government finances, borrowing costs and political stability. The Stoxx Europe 600 declined 0.80% to 639.56. France's CAC 40 fell 1.11% to 7,868.05, Germany's DAX lost 1.18% to 25,319.77 and the U.K. FTSE 100 dropped 1.08% to 10,764.69. Italy's FTSE MIB declined 1.55% to 49,086.27. French government bond yields climbed as investors demanded additional compensation for sovereign risk, while weakness in the euro provided some support for the U.S. dollar.
Market positioning remains focused on the divergence between slowing employment growth and persistent inflation. September CPI rose 0.6% on the month and 3.7% annually, while producer prices climbed 1.3% on the month and 6.3% from a year earlier. September retail sales increased 0.8%, indicating continued consumer resilience despite elevated borrowing costs. Futures markets put the probability of an October Fed rate increase in the mid-teens, leaving a pause at the Oct. 27-28 meeting as the base case, while the probability of additional tightening in December remained close to 90%. The benchmark 10-year Treasury yield rose to approximately 5.135%, reversing part of last week's bond-market rally and increasing pressure on non-yielding gold. China's third-quarter economic growth accelerated to 4.5% year over year from 4.3% in the second quarter, supported by exports, although domestic consumption and property investment remained weak. The next major U.S. economic tests are Tuesday's housing starts and pending home sales, Thursday's weekly jobless claims and Friday's preliminary purchasing managers' indexes and final October consumer sentiment. Softer activity and employment data would support gold through lower yields, while resilient demand and elevated inflation expectations would reinforce December tightening risk.
The Strait of Hormuz and U.S.-Iran situation remains a major source of energy-market uncertainty, even as oil futures retreated from recent highs Monday. President Donald Trump's decision to waive some newly imposed sanctions and tariffs affecting Russian energy exports raised expectations for additional fuel supplies, but shipping disruptions in the Middle East continued to constrain the market. Iranian forces have been linked to renewed attacks on commercial vessels around Hormuz, while Yemen's Iran-aligned Houthis claimed additional attacks against Saudi energy and military facilities. The latest Houthi claims had not been independently confirmed. Crude shipments through Hormuz remain below prewar levels, and the absence of a durable U.S.-Iran agreement continues to support a geopolitical risk premium. December Brent crude settled at $109.55 a barrel, down 0.3%, while December WTI settled at $98.54, down 0.5%. The expiring November WTI contract rose to $103.66 amid thin trading. For gold, geopolitical uncertainty remains supportive of defensive demand, but elevated energy prices continue to threaten higher inflation expectations, Treasury yields and a stronger dollar.
The key outside markets see December Nymex WTI crude oil prices lower and settled near $98.54 a barrel, while December Brent crude settled near $109.55. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.14% area. The U.S. dollar index is firmer, supported partly by euro weakness. (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 $4,170.55 to $4,193.95 resistance zone, with a sustained move targeting $4,201.00 and then $4,218.00. Bears' next near-term downside price objective is a break below $4,132.00, with deeper downside targets at $4,111.00 and then $4,070.00. First resistance is seen at $4,142.03 and then at $4,170.55. First support is seen at $4,135.70 and then at $4,132.00.
Spot silver bulls' next upside price objective is to drive prices back above the $57.281 to $57.670 area, with a move above that zone targeting $57.860 and then $58.700. The next downside price objective for the bears is a break below $56.584, with deeper downside targets at $56.340 and then $55.410. First resistance is seen at $57.281 and then at $57.670. Next support is seen at $56.920 and then at $56.584.
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