(Kitco NewsWire) – Spot gold and silver prices were sharply lower in early U.S. trading Thursday, extending their decline as persistent U.S. inflation, expectations for additional Federal Reserve tightening and a stronger dollar pressured precious metals. Gold fell to its lowest level in more than a week, while silver weakened amid concerns about industrial demand and tighter financial conditions. Spot gold last traded at $3,890.46 an ounce, down $97.110, or 2.38%, while spot silver last traded at $50.186, down $1.449, or 2.80%.
Thursday's U.S. labor-market data showed initial unemployment claims increasing to 200,000 in the week ended Nov. 7, compared with a revised 191,000 the previous week and expectations for approximately 195,000. The four-week moving average remained at 195,250, indicating that layoffs continue to be limited despite elevated borrowing costs. The figures followed Tuesday's stronger-than-expected consumer inflation report, which showed headline prices increasing 0.4% in October and core prices rising 0.3%. Friday's October employment report had also shown payrolls increasing by 165,000, with unemployment declining to 4.1% and average hourly earnings rising 0.4% on the month. Together, the releases suggest that employment conditions remain resilient while inflation has yet to moderate sufficiently to reduce pressure on the Fed.
Market positioning continues to reflect expectations for another Federal Reserve interest rate increase at the Dec. 8-9 meeting, with recent futures assessments assigning approximately an 88% to 91% probability to a 25-basis-point increase and a smaller probability to a 50-basis-point move. The benchmark 10-year Treasury yield was trading around 5.00% as cash markets reopened following Wednesday's Veterans Day closure, while the two-year yield advanced toward 4.76%. The dollar index remained firm near 102.85 after reaching a 19-month high, increasing the cost of gold for buyers holding other currencies. Thursday's jobless claims provided limited evidence of cooling employment conditions, but Friday's October producer price index, scheduled for 8:30 a.m. EST, remains the next major inflation catalyst. Softer producer prices could relieve some pressure on yields and bullion, while another upside surprise would reinforce expectations for further tightening.
The Strait of Hormuz and U.S.-Iran confrontation remains unresolved, with commercial shipping still severely disrupted following attacks on tankers and stalled negotiations between Washington and Tehran. Ship-tracking data showed only five commodity vessels transiting the waterway on a recent Saturday and none the following Sunday, compared with 31 during the preceding weekend. Diplomatic efforts involving Gulf intermediaries have yet to produce an agreement on sanctions, Iran's nuclear activities, the U.S. naval blockade or maritime security guarantees. Reports that Washington is reluctant to undertake additional major strikes have encouraged some reduction in oil's geopolitical risk premium, but renewed attacks or a breakdown in mediation could quickly reverse that decline. For gold, continuing regional instability supports defensive demand, although higher energy prices could also reinforce inflation and Fed tightening expectations.
Crude oil prices remained volatile Thursday following Wednesday's rebound from two-month lows. Earlier Asian trading saw Brent decline toward $91.62 a barrel and WTI toward $85.49 amid hopes for diplomatic progress, although subsequent market indications pointed to a recovery in both benchmarks. The conflicting moves reflect uncertainty about Gulf supply security and the prospects for a negotiated settlement. Oil prices remain below their October highs, providing some relief from energy-related inflation concerns, but continuing shipping restrictions prevent the geopolitical risk premium from disappearing entirely.
Global equity markets were mixed as investors assessed the possibility of further Federal Reserve tightening and renewed volatility in artificial intelligence-related shares. Wednesday's U.S. session saw the Dow Jones Industrial Average advance 0.49%, the S&P 500 gain 1.31% and the Nasdaq Composite rise 1.60%, supported by renewed technology buying. European markets also finished higher, with the Stoxx 600 gaining 0.72% and Germany's DAX advancing 1.20%. Thursday's market focus has shifted back toward rising Treasury yields, dollar strength and the implications of restrictive monetary policy for equity valuations and corporate financing.
The key outside markets see the benchmark 10-year U.S. Treasury yield near 5.00%, while the two-year yield was around 4.76%. Brent and WTI crude oil continued to fluctuate around the low-90s to mid-80s areas, respectively, as investors weighed U.S.-Iran diplomacy against ongoing supply disruptions. The dollar index remained firm near 102.85. (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 $3,944.00 to $3,948.98 resistance zone, with a sustained move targeting $3,992.00 and then $4,022.00. Bears' next near-term downside price objective is a break below $3,919.18, with deeper downside targets at $3,896.00 and then $3,870.00. First resistance is seen at $3,944.00 and then at $3,948.98. First support is seen at $3,919.18 and then at $3,896.00.
Spot silver bulls' next upside price objective is to push prices back above the $51.140 to $52.390 resistance zone, with a sustained move targeting $53.430. The next downside price objective for the bears is a break below $50.579, with a deeper downside target at $50.120. First resistance is seen at $51.140 and then at $52.390. Next support is seen at $50.579 and then at $50.120.
See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.
