(Kitco NewsWire) – Spot gold prices were slightly lower and spot silver prices were higher in early U.S. trading Monday, as declining oil prices and lower Treasury yields provided support for precious metals while persistent inflation and expectations for additional Federal Reserve tightening limited buying interest. At the time of writing, spot gold was trading near $4,159.70 an ounce, down $4.40, or 0.11%, while spot silver was trading near $57.300, up $0.437, or 0.77%.
Market positioning remains divided between persistent inflation pressure and growing concerns about financial-market stability following last week's technology-led equity selloff. September consumer inflation rose 0.6% on the month and 3.7% annually, while producer prices surged 1.3% and 6.3%, respectively. Friday's import-price report reinforced the inflation picture, showing a 1.1% monthly increase in September, while export prices climbed 2.2%. Industrial production provided a contrasting signal of economic resilience, rising 0.7% in September, with manufacturing output increasing 0.3%.
Despite the inflation surprises, expectations for an October Fed rate hike have eased considerably. Traders now assign approximately a 15% probability to an increase at the Oct. 27-28 meeting, leaving a pause as the base case. December tightening remains heavily priced, with the probability of another 25-basis-point increase near 89%. The benchmark 10-year Treasury yield was trading around 5.08%, near a four-week low, as concerns about AI-sector financing and stretched equity valuations continued to support government bonds. The dollar index was little changed near 101.9. The Fed is in its premeeting communications blackout, shifting attention to incoming data. This week's principal releases include housing starts Tuesday, weekly jobless claims Thursday and preliminary business activity surveys and final October consumer sentiment Friday. Softer employment and inflation-expectations data would support gold through lower yields and reduced tightening risk, while resilient activity and persistent cost pressure could reinforce December hike expectations.
The Strait of Hormuz and U.S.-Iran situation remains a significant source of energy-market uncertainty, although Monday's immediate market impact was less inflationary. Oil prices declined after President Donald Trump temporarily waived certain sanctions and tariffs on Russia, raising expectations of additional Russian fuel exports. Iran also reiterated that its proposal to reopen the Strait of Hormuz within seven days remains available, although negotiations with Washington have stalled over Tehran's conditions, including sanctions relief and an end to the blockade of Iranian ports. The underlying supply disruption remains substantial. Oil shipments through Hormuz averaged approximately 10.17 million barrels per day over the latest seven-day period, roughly 41% below prewar levels, while alternative export routes have only partially offset the shortfall. Continued tanker attacks, elevated insurance costs and unresolved military tensions leave the shipping corridor exposed to renewed disruption. Brent crude traded near $107.55 a barrel, while WTI was near $97.19.
For gold, lower crude prices ease some inflation and interest-rate pressure, but the unresolved Gulf-security risk continues to underpin defensive demand. Silver benefits from the broader rates relief but remains sensitive to concerns about industrial activity.
Global risk sentiment was mixed before the U.S. open. Nasdaq futures rose approximately 1.3% and S&P 500 futures gained 0.5% as technology shares recovered from last week's selling, while Dow futures slipped 0.2%. European equities were weaker, with France's CAC 40 down approximately 1.3% amid fiscal concerns and protests, Germany's DAX lower by 1.0% and the U.K. FTSE 100 down 0.8%. Asian markets were mixed, with South Korea's Kospi gaining 1.8% and Japan's Nikkei 225 falling 0.6%. Investors are also positioning for major U.S. corporate earnings this week, with results from large technology and industrial companies expected to provide another test of equity valuations and credit-market sentiment.
The key outside markets see Nymex WTI crude oil prices lower and trading near $97.19 a barrel, while Brent crude was near $107.55. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.08% area. The U.S. dollar index is little changed near 101.9. (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 $4,193.95 to $4,202.64 resistance zone, with a sustained move targeting $4,217.40 and then $4,222.47. Bears' next near-term downside price objective is a break below $4,142.03, with deeper downside targets at $4,118.63 and then $4,066.71. First resistance is seen at $4,170.55 and then at $4,193.95. First support is seen at $4,150.72 and then at $4,142.03.
Spot silver bulls' next upside price objective is to drive prices back above the $57.670 to $57.860 area, with a move above that zone targeting $58.367 and then $59.453. The next downside price objective for the bears is a break below $56.584, with deeper downside targets at $56.195 and then $55.109. First resistance is seen at $57.670 and then at $57.860. Next support is seen at $57.281 and then at $56.584.
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