(Kitco NewsWire) - Spot gold and silver prices were sharply lower in late U.S. trading Thursday, pressured by rising Treasury yields, a firm U.S. dollar and expectations for additional Federal Reserve interest rate increases. Gold extended its decline below $3,900.00 an ounce as investors reassessed the outlook for restrictive monetary policy, while silver suffered heavier percentage losses amid renewed concerns about industrial demand and equity-market volatility. Spot gold was trading near $3,876.40 an ounce, down $110.60, or 2.77%, while spot silver was trading near $49.930, down $1.610, or 3.13%.
Thursday's U.S. economic reports highlighted the competing pressures of resilient employment conditions and weakening interest-rate-sensitive sectors. Initial jobless claims increased to 200,000 in the week ended Nov. 7, compared with expectations near 195,000, but remained consistent with relatively limited layoffs. October existing-home sales fell 5.5% to a seasonally adjusted annual rate of 3.75 million, the weakest pace since August 2010, as mortgage rates above 7% restrained demand. The housing figures followed Tuesday's stronger-than-expected consumer inflation report, which showed headline prices rising 0.4% and core prices increasing 0.3% in October. Together with last week's stronger employment report, the data indicate that elevated borrowing costs are restricting housing activity without yet producing sufficient relief from inflation.
Market positioning remained firmly focused on additional Federal Reserve tightening. Late-session futures assessments indicated approximately an 85% probability of a 25-basis-point increase at the Dec. 8-9 meeting and a 15% probability of a 50-basis-point move. Treasury yields rose sharply, with the benchmark 10-year yield reaching approximately 5.102% and the two-year yield climbing to 4.862%, reflecting expectations that monetary policy may remain restrictive for longer. The dollar also remained strong, compounding pressure on gold and silver. Friday's October producer price index, scheduled for release at 8:30 a.m. EST, is the next major inflation test. Another upside surprise could reinforce expectations for aggressive tightening, while softer producer prices could provide some relief to Treasury yields and precious metals.
The Strait of Hormuz and U.S.-Iran confrontation remained a major source of uncertainty Thursday after President Donald Trump indicated that Washington was no longer interested in pursuing a negotiated settlement with Tehran. The comments represented a significant shift from earlier indications that additional U.S. military strikes were unlikely and prompted traders to rebuild some of the geopolitical risk premium in crude oil prices. Commercial shipping through the strategic waterway remains heavily restricted, while disagreements over Iran's nuclear program, sanctions, the U.S. naval blockade and maritime security remain unresolved. No comprehensive agreement has been reached. The renewed uncertainty supports underlying defensive demand for gold, but higher oil prices also threaten to reinforce inflation expectations and the case for additional Fed tightening.
Crude oil prices climbed Thursday as the shift in Washington's diplomatic position renewed concerns about Middle Eastern petroleum supplies. Nymex WTI futures advanced approximately 2.6% to $88.74 a barrel, while Brent crude gained about 3.3% to $95.82. The rebound occurred despite reported increases in U.S. petroleum inventories, highlighting the continued influence of geopolitical developments on energy pricing. For precious metals, the competing effects remain significant: regional instability supports safe-haven demand, while higher energy costs, rising Treasury yields and restrictive monetary policy expectations create substantial headwinds.
North American equity markets finished lower Thursday following a volatile session dominated by uncertainty surrounding Nvidia's leadership and renewed concerns about technology-sector valuations. Nvidia co-founder Jensen Huang resigned as chief executive, triggering a sharp decline in the company's shares before losses moderated. The Dow Jones Industrial Average declined approximately 0.4% to close at 52,297.09, while the S&P 500 also fell around 0.4% to 7,592.40. The Nasdaq Composite slipped approximately 0.4% to 25,366.09, while the Russell 2000 underperformed, losing 1.7% to finish at 2,799.06. Rising Treasury yields and concerns about artificial intelligence investment added to broader market uncertainty.
Canadian equities were also under pressure Thursday as weakness in technology and precious metals shares weighed on sentiment. The S&P/TSX Composite Index declined in early trading, reflecting the impact of the Nvidia developments on technology companies and the sharp retreat in bullion prices on Canadian mining equities. Energy producers received some support from the recovery in crude oil prices. The TSX closed at 36,137.19 for a loss of 0.75% on the session.
European equity markets finished modestly higher Thursday, outperforming Wall Street as stronger corporate earnings and gains in selected industrial and consumer shares offset weakness in artificial intelligence-related stocks. The pan-European Stoxx 600 advanced approximately 0.2% to the 664-point area, while Germany's DAX gained around 0.5%. France's CAC 40 rose approximately 0.3% to 8,361.36, while the U.K.'s FTSE 100 added roughly 0.3%. The gains occurred despite persistent inflation concerns and rising European borrowing costs, with investors continuing to assess corporate earnings and the implications of restrictive monetary policy.
The key outside markets see Nymex WTI crude oil futures higher near $88.74 a barrel, while Brent crude was around $95.82. The benchmark 10-year U.S. Treasury yield climbed toward 5.10%, while the two-year yield approached 4.86%. The dollar remained firm as investors reassessed the prospect of additional Fed tightening. (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 $3,896.00 to $3,944.00 resistance zone, with a sustained recovery targeting $3,992.00 and then $4,022.00. Bears' next near-term downside price objective is a break below the session low at $3,852.10, with a deeper downside reference at the published $3,830.33 technical support level. First resistance is seen at $3,896.00 and then at $3,944.00. First support is seen at $3,852.10 and then at $3,830.33.
Spot silver bulls' next upside price objective is to drive prices back above the $50.120 to $51.140 resistance zone, with a sustained move targeting $52.390 and then $53.430. The next downside price objective for the bears is a break below the session low at $49.590. First resistance is seen at $50.120 and then at $51.140. Next support is seen at $49.590. A deeper downside objective was not independently established in the available same-day named-analyst reports.
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