Gold and silver sold off late in Thursday’s U.S. session as Treasury yields and the dollar rose, while markets increased the odds of further Federal Reserve rate hikes. Spot gold fell below $3,900 an ounce to $3,876.40, down $110.60, or 2.77%. Spot silver lost $1.610, or 3.13%, to $49.930. Silver’s steeper decline reflected concern about industrial demand as well as volatility in equity markets.
Higher yields weigh on precious metals
U.S. Treasury yields climbed sharply, with the 10-year yield reaching about 5.102% and the two-year yield rising to 4.862%. The dollar remained firm. Higher yields increase the opportunity cost of holding non-yielding precious metals, while a stronger dollar makes dollar-priced gold and silver more expensive for buyers using other currencies.
Interest-rate futures late Thursday put the probability of a 25-basis-point Fed hike at the December 8–9 meeting at about 85%, with a 50-basis-point increase assigned a roughly 15% chance. Traders are weighing the prospect that interest rates will stay high for longer, adding pressure to bullion.
Jobs remain resilient as home sales slide
Initial U.S. jobless claims rose to 200,000 in the week ended November 7, above market expectations of about 195,000, though layoffs remained relatively limited. Existing-home sales, by contrast, fell 5.5% in October to a seasonally adjusted annual rate of 3.75 million, their lowest level since August 2010. Mortgage rates above 7% continue to constrain housing demand.
The data point to a resilient labor market alongside a marked cooling in interest-sensitive housing activity. October consumer prices, reported earlier, rose 0.4% month over month overall and 0.3% excluding food and energy. Together with stronger-than-expected employment data last week, the figures have yet to provide a clear signal that inflation pressures are easing.
The next major inflation release is the October Producer Price Index, due Friday at 8:30 a.m. Eastern time. A stronger reading could reinforce expectations for tighter policy, while a softer one could ease pressure on yields and precious metals.
Middle East supply risks lift oil prices
Shipping through the Strait of Hormuz remains severely restricted, while differences over Iran’s nuclear program, sanctions, maritime security and a U.S. naval blockade remain unresolved. No comprehensive agreement has been reached. Changes in diplomatic positions prompted markets to reassess Middle East supply risks, helping lift crude prices on Thursday.
Geopolitical uncertainty can support safe-haven demand for gold, but higher oil prices may also fuel inflation concerns and strengthen expectations for further rate increases—an opposing force for bullion.
New York Mercantile Exchange WTI crude futures rose about 2.6% to $88.74 a barrel, while Brent gained about 3.3% to $95.82. Prices were supported by supply concerns despite a reported increase in U.S. oil inventories. The competing effects of energy prices, Treasury yields and monetary-policy expectations formed a key backdrop for precious metals’ decline.
Key levels for gold and silver
Gold touched an intraday low of $3,852.10. Initial resistance stands at $3,896, followed by $3,944; further reference levels are $3,992 and $4,022. Support is at the session low of $3,852.10, with $3,830.33 as the next reference level.
Silver’s low for the day was $49.590. Resistance levels are $50.120 and $51.140, followed by $52.390 and $53.430. Initial support is $49.590. These levels reflect the day’s technical market observations; prices remain influenced by interest rates, the dollar and expectations for industrial demand.