Gold holds gains, silver slips as Wall Street plunges, Fed hike bets ease - Kitco PM Report

(Kitco NewsWire) - Spot gold prices were higher and spot silver prices were lower in late U.S. trading Thursday, as a sharp technology-led equity market selloff drove Treasury yields lower and reduced expectations for additional Federal Reserve tightening in December. Renewed attacks on commercial shipping near the Strait of Hormuz pushed crude oil prices higher, reversing part of Wednesday's steep decline and adding to uncertainty surrounding the inflation outlook. Gold retained much of its post-election recovery as investors sought defensive assets, while silver surrendered earlier gains amid heavy selling across technology and industrially sensitive markets. At the latest verified afternoon quotation, spot gold was trading near $4,087.26 an ounce, up $25.93, or 0.64%, while spot silver was trading near $51.778, down $0.407, or 0.78%, on the session. Gold had earlier reached $4,148.00, its highest intraday level since Oct. 20, before retreating as the equity selloff intensified.Thursday's U.S. economic reports pointed to stronger labor productivity and moderating wage-related inflation pressure, while initial jobless claims indicated that layoffs remain limited. Nonfarm business productivity increased at a 3.6% annualized rate in the third quarter, above expectations for a 2.8% gain and accelerating from an upwardly revised 2.1% in the second quarter. Output increased 3.7%, while hours worked edged up 0.1%. Unit labor costs declined at a 0.7% annualized rate, compared with expectations for a 0.6% increase, reversing the previous quarter's revised 1.9% rise. The decline suggests that stronger productivity is helping businesses absorb compensation increases without equivalent increases in production costs, potentially reducing one source of underlying inflation pressure.Weekly initial jobless claims declined by 6,000 to a seasonally adjusted 189,000 in the week ended Oct. 31, their lowest level since mid-July, while the four-week moving average fell to 194,750. Continuing claims increased to approximately 1.718 million in the preceding reporting week. The figures suggest that employers remain reluctant to reduce staffing despite slowing hiring and uncertainty surrounding corporate investment. The combination of limited layoffs and improving productivity presents a relatively resilient labor-market picture, although Thursday's sharp equity-market decline increased concerns that pressure on technology and artificial intelligence investment could eventually weaken broader business activity.Market positioning shifted significantly Thursday as the selloff in U.S. equities encouraged demand for government bonds and reduced expectations for another Federal Reserve rate increase in December. The benchmark 10-year Treasury yield fell to approximately 4.82% during the session, its lowest level since early September, while the two-year yield declined toward the 4.48% area. Interest rate futures reduced the implied probability of a December increase to approximately 66% to 69%, compared with about 83% Wednesday. The decline reflected growing concerns that tighter financial conditions, weaker technology-sector investment and potentially more restrictive congressional oversight of artificial intelligence infrastructure could slow economic growth. For gold, the retreat in yields and December tightening expectations provided support, although silver's decline indicated that concerns about industrial demand and broader liquidation pressure remained important influences.Attention now turns to Friday's October U.S. employment report, scheduled for release at 8:30 a.m. EST. Economists expect nonfarm payrolls to increase by approximately 65,000, while the unemployment rate is forecast to remain near 4.2%. Average hourly earnings will be closely examined for evidence that wage pressures are moderating following Thursday's decline in unit labor costs. The preliminary November University of Michigan consumer sentiment survey follows at 10 a.m. EST, providing another assessment of household confidence and inflation expectations. Softer payroll growth or moderating wages could further reduce December rate hike expectations and support gold through lower Treasury yields and a weaker dollar. However, stronger employment figures or persistent wage inflation could reverse part of Thursday's bond rally, particularly if renewed energy-price increases add to inflation concerns.The Democratic victories in Tuesday's U.S. midterm elections remained another significant influence on financial markets Thursday, although the initial post-election equity rally gave way to heavy selling in technology shares. Democrats' control of both chambers of Congress raised expectations for greater oversight of artificial intelligence investment, data-center development and related energy infrastructure. Concerns that tighter regulation or delays in construction could weaken projected demand for semiconductor equipment and cloud-computing capacity contributed to the sharp decline in major technology companies. At the same time, expectations that a divided government could limit additional fiscal expansion continued to support demand for Treasury securities. The potential effect on gold remains mixed: lower yields and a softer dollar are supportive, but the broader liquidation of risk assets can also pressure precious metals, particularly silver.The Strait of Hormuz and U.S.-Iran situation remained a significant source of volatility Thursday as renewed attacks on commercial shipping complicated expectations for a negotiated end to the conflict. Iranian military authorities claimed that five oil tankers and a tugboat had been damaged or caught fire in separate incidents involving naval mines in and around the strategic waterway. The claims have not been independently confirmed in full. Separately, British maritime security authorities confirmed that a tanker was struck by two projectiles approximately 50 nautical miles north of Qatar's Madinat ash-Shamal late Wednesday. The incidents reinforced concerns that commercial shipping remains vulnerable despite renewed diplomatic efforts following the U.S. midterm elections.Qatar continues to mediate between Washington and Tehran, although no binding agreement has emerged over sanctions relief, Iran's nuclear program, the U.S. naval blockade of Iranian ports or the conditions for restoring normal commercial traffic through the Strait of Hormuz. Iranian officials have maintained that any reopening agreement must address Tehran's security and economic demands, while Washington has not accepted the proposed framework. The Democratic congressional victories have increased expectations for greater scrutiny of further U.S. military operations, but the election outcome does not eliminate the possibility of renewed escalation. Continuing attacks on vessels, elevated insurance costs and uncertainty surrounding maritime security arrangements leave the strategic shipping corridor exposed to additional disruption.Crude oil prices rebounded sharply Thursday as renewed tanker attacks and uncertainty about U.S.-Iran negotiations restored some of the geopolitical risk premium removed during Wednesday's decline. Brent crude futures gained $3.67, or 3.88%, to settle at $98.29 a barrel, while Nymex WTI crude futures advanced $2.40, or 2.72%, to settle at $90.52. The recovery followed Wednesday's decline of more than 8% in both benchmarks, leaving energy markets sensitive to any further military or diplomatic developments. For gold, the continuing Gulf confrontation supports defensive demand, but higher oil prices also threaten to reinforce inflation expectations and complicate the Federal Reserve's policy outlook. Silver faces the additional risk that elevated energy costs, weaker equity markets and a slowdown in technology-sector investment could restrain industrial consumption.North American equity markets finished sharply lower Thursday as renewed concerns about artificial intelligence spending, data-center investment and tighter regulation triggered heavy selling across technology and semiconductor shares. The Dow Jones Industrial Average plunged 1,833.06 points, or 3.44%, to close at 51,523.06, while the S&P 500 dropped 4.36% to 7,353.73, its steepest daily decline since April 2025. The Nasdaq Composite tumbled approximately 5.52% to finish near 24,315, entering correction territory after falling nearly 12% from its October peak. The Russell 2000 lost approximately 4.4% to close at 2,729.89, reflecting broad selling across smaller companies as concerns about financing conditions and economic growth intensified.Semiconductor and artificial intelligence-related companies were among the hardest hit. Nvidia declined approximately 9.3%, while Advanced Micro Devices lost 17.3% as investors reassessed expectations for continued growth in data-center investment. The Philadelphia Semiconductor Index fell approximately 12%, reflecting concerns that elevated financing costs, political scrutiny and potential delays in infrastructure development could undermine earnings expectations across the sector. The broad deterioration in equity sentiment encouraged demand for U.S. government bonds, helping drive Treasury yields lower even as crude oil prices rebounded.Canada's S&P/TSX Composite Index also declined sharply Thursday, falling approximately 1.53% to finish near 35,785, reversing much of Wednesday's post-election advance. Technology shares led the Canadian market lower as the U.S. semiconductor and artificial intelligence selloff spread to Canadian companies. Celestica and other technology-related shares faced significant pressure, while weakness in broader risk sentiment weighed on financial and industrial stocks. Gains in selected energy companies, supported by the rebound in crude oil prices, provided some offset. The Canadian benchmark nevertheless outperformed the major U.S. indexes, reflecting its smaller technology-sector weighting and greater exposure to traditional resource industries.European equity markets reversed earlier gains and finished mostly lower Thursday as weakness in semiconductor and defense shares overshadowed stronger performance in mining and selected banking companies. The pan-European Stoxx 600 declined approximately 0.6% to the 653-point area after approaching its previous record high earlier in the session. Germany's DAX fell approximately 0.4% to near 26,330, while the U.K.'s FTSE 100 lost roughly 0.5% to around 10,771. France's CAC 40 outperformed, gaining approximately 0.3% to finish near 8,201. The European technology sector fell nearly 4%, with semiconductor equipment and materials companies particularly weak. Defense stocks also declined sharply following disappointing corporate guidance, while resource companies benefited from firmer metals prices. The Bank of England increased its benchmark interest rate to 4.00%, underscoring the continuing divergence between inflation concerns and deteriorating financial-market sentiment.The key outside markets see Nymex WTI crude oil futures higher and settling at $90.52 a barrel, while Brent crude futures finished at $98.29. The yield on the benchmark 10-year U.S. Treasury note declined toward the 4.82% area as investors sought the relative safety of government bonds during the equity selloff. The U.S. dollar remained comparatively soft following the Democratic midterm victories, although renewed financial-market instability and the rebound in crude oil prices complicated the outlook for precious metals. (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 $4,146.00 resistance level, with a sustained four-hour close above that area targeting $4,212.00. Bears' next near-term downside price objective is a break below $4,075.00, with a deeper downside target at $3,989.00. First resistance is seen at $4,146.00 and then at $4,212.00. First support is seen at $4,075.00 and then at $3,989.00.Spot silver bulls' next upside price objective is to drive prices back above the $53.070 to $54.450 resistance zone, with a sustained breakout targeting $56.360. The next downside price objective for the bears is a break below $51.240, with a deeper downside target at $50.030. First resistance is seen at $53.070 and then at $54.450. Next support is seen at $51.240 and then at $50.030.See live precious metals prices for gold, silver, platinum and palladium — in USD, CAD and 12 more currencies.

Gold holds gains, silver slips as Wall Street plunges, Fed hike bets ease - Kitco PM Report

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