(Kitco NewsWire) - Spot gold and silver prices were sharply lower in late U.S. trading Friday, as a technology-led equity market selloff intensified liquidation pressure across precious metals, offsetting the support normally provided by falling Treasury yields and heightened geopolitical uncertainty. Crude oil prices climbed more than 2% following another tanker attack in the Strait of Hormuz, adding to inflation concerns and expectations that Federal Reserve monetary policy will remain restrictive. Spot gold was trading near $3,879.90 an ounce, down $141.60, or 3.52%, while spot silver was trading near $49.015, down $3.150, or 6.06%, on the session.
Friday's U.S. economic reports presented a mixed picture of moderating wage growth and weakening regional manufacturing activity. The employment cost index increased 0.8% in the third quarter, matching expectations and slowing from 0.9% in the second quarter. The October Chicago purchasing managers' index declined to 55.3 from 58.8 in September, missing expectations near 56.1 but remaining above the 50-point threshold separating expansion from contraction. Friday's softer wage and manufacturing readings followed Thursday's stronger-than-expected third-quarter gross domestic product report, which showed the U.S. economy expanding at a 3.4% annualized pace, compared with 2.2% in the second quarter. September headline personal consumption expenditures inflation accelerated to 3.6% annually, while core PCE inflation increased to 3.1%, reinforcing concerns about persistent underlying price pressure.
Market positioning remains divided between resilient economic growth, persistent inflation and the growing risk of financial-market instability. The Federal Reserve left its benchmark interest rate unchanged at 3.75% to 4.00% Wednesday, with two policymakers favoring an immediate 25-basis-point increase. Interest rate futures continued to reflect substantial expectations for further tightening in December, although Friday's moderating employment costs and sharp equity-market decline provided counterweights to the inflationary implications of strong GDP growth and higher energy prices. Treasury yields fell as investors sought the relative safety of government bonds, with the benchmark 10-year yield retreating toward 4.93% and the two-year yield approaching 4.58%. However, gold continued to decline, suggesting that forced liquidation, portfolio rebalancing and the broader outlook for restrictive monetary policy outweighed immediate safe-haven demand.
The Strait of Hormuz and U.S.-Iran situation remained a major source of energy-market uncertainty Friday after another commercial tanker was attacked in the strategic waterway. The vessel was struck by explosive devices attached to its hull by a small boat, highlighting the continuing vulnerability of commercial shipping despite regional diplomatic efforts aimed at reducing tensions. Responsibility for the attack had not been established. The incident intensified concerns that renewed military confrontation involving Iran and the United States could further disrupt Middle Eastern energy exports, particularly as markets assessed the possibility of additional military action following the Nov. 3 U.S. midterm elections. Negotiations involving Washington, Tehran and regional mediators have yet to produce a confirmed settlement, leaving disagreements over sanctions, maritime security and the future of commercial access through Hormuz unresolved.
Crude oil futures rose more than 2% Friday, reaching their highest settlements since late April as traders assessed the possibility of renewed disruptions to Gulf energy supplies. December Brent crude futures gained $2.76, or 2.4%, to settle at $117.64 a barrel after reaching $118.00 intraday. The more actively traded January Brent contract advanced $2.63 to $113.43, while Nymex WTI futures increased $2.12, or 2.08%, to settle at $104.12. Brent gained approximately 13.6% during October, while WTI rose 15.2%, reflecting persistent concerns about Middle Eastern supply security and the inflationary consequences of the regional conflict.
For gold, the latest Hormuz attack reinforced underlying geopolitical demand, but higher crude prices also heightened the risk that inflation will remain persistent and the Federal Reserve will maintain restrictive monetary policy. The sharp decline in bullion despite falling Treasury yields indicates that broader financial-market liquidation was the more immediate influence on Friday's trading. Silver suffered considerably greater losses as weakness in precious metals coincided with concerns about industrial demand, equity-market valuations and restrictive financing conditions. The widening gold-silver ratio reflected silver's greater sensitivity to deteriorating risk sentiment and concerns about manufacturing activity.
North American equity markets finished sharply lower Friday as disappointing corporate earnings and concerns about artificial intelligence-related investment triggered heavy selling in technology shares. The Dow Jones Industrial Average declined approximately 1.1% to close at 51,770.31, while the S&P 500 fell 1.8% to 7,580.07, its largest daily decline since June. The Nasdaq Composite dropped 2.9% to finish near 25,437, as weakness in semiconductor and major technology shares dominated trading. Intel plunged nearly 29% following disappointing profit guidance, while concerns surrounding Amazon's capital spending added to pressure on the technology sector. The Russell 2000 declined 1.7% to 2,811.84, indicating that selling extended beyond large-cap growth companies. Canada's S&P/TSX Composite Index also fell sharply, losing more than 2% as weakness in precious metals mining and other resource shares compounded the broader deterioration in risk sentiment.
European equity markets closed mostly lower Friday as technology-sector weakness and concerns about elevated energy prices weighed on investor sentiment. The pan-European Stoxx 600 declined approximately 0.4% to 646.73, while Germany's DAX lost 0.9% to finish near 25,819. France's CAC 40 slipped 0.1% to approximately 7,962, while the U.K.'s FTSE 100 outperformed, advancing 0.1% to around 10,736. The Euro Stoxx 50 fell approximately 1.2%, reflecting heavier losses among major continental companies. European technology shares were particularly weak as the U.S. semiconductor selloff affected global valuations, while higher crude prices added to concerns about inflation, corporate margins and the outlook for regional monetary policy. Despite Friday's losses, the Stoxx 600 finished October higher, reflecting gains earlier in the month.
The key outside markets see Nymex WTI crude oil futures higher and settling at $104.12 a barrel, while December Brent crude futures finished at $117.64. The yield on the benchmark 10-year U.S. Treasury note declined toward the 4.93% area as demand for government bonds increased during the equity selloff. The U.S. dollar was comparatively firm, supported by defensive demand and expectations for restrictive Federal Reserve policy. (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 $3,890.00 to $3,910.00 resistance zone, with a sustained recovery targeting $3,943.00 and then $3,975.00. Bears' next near-term downside price objective is to maintain prices below $3,890.00, with deeper downside targets at $3,800.00 and then $3,780.00. First resistance is seen at $3,890.00 and then at $3,910.00. The next support zone is seen at $3,780.00 to $3,800.00, following the breakdown below the former $3,890.00 support area.
Spot silver bulls' next upside price objective is to drive prices back above the $51.000 to $52.000 resistance zone, with a sustained move targeting $52.690 and then $55.000. The next downside price objective for the bears is a sustained break below $49.000, with deeper downside targets at $48.000 and then $47.000. First resistance is seen at $51.000 and then at $52.000. Next support is seen at $49.000 and then at the $47.000 to $48.000 area.
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