Gold edges higher after falling to a 13-month low

Spot gold was near $3,891.50 an ounce, up $15.10, or 0.39%. Spot silver traded around $49.960, up $0.010, or 0.02%. The rebound followed the U.S. Labor Department’s report that the producer price index rose 0.3% in October, below economists’ 0.4% forecast and well below September’s revised 1.4% increase.

The annual PPI rate, however, accelerated to 6.5%, its highest since November 2022. Prices for final-demand goods rose 0.5% and services prices gained 0.2%. An index excluding food, energy and trade services increased 0.5%, matching September and pointing to persistent underlying pressure. The data followed hotter-than-expected consumer inflation figures and an October jobs report showing 165,000 new positions and unemployment at 4.1%.

Markets were focused on the Federal Reserve’s Dec. 8-9 meeting. Before Friday’s PPI release, futures implied an 89% probability of a 25-basis-point rate increase and an 11% chance of a 50-basis-point move. New York Fed President John Williams said Thursday that further action would likely be needed to curb inflation, while cautioning against excessive harm to employment. The softer headline PPI reading may temper expectations for more aggressive tightening, but the underlying figures offer little reason to expect a sharp shift in rate bets.

Investors were also weighing the unresolved U.S.-Iran confrontation and risks to shipping through the Strait of Hormuz. Washington’s naval blockade of Iran remains in place, while attacks by Iranian-aligned Houthi forces on commercial tankers and Saudi energy infrastructure continue to threaten regional oil supplies. The tensions support defensive demand for gold, but the risk of higher energy prices could also reinforce expectations for restrictive Fed policy. Oil was mixed to slightly lower, with Brent near $95.54 a barrel and Nymex WTI around $88.18. The 10-year Treasury yield stood near 5.13%, the two-year yield near 4.86%, and the dollar index remained above 103.

Gold’s first resistance was identified at $3,903.00, followed by $3,911.36; support was at $3,852.00 and then $3,823.00. Silver faced resistance at $50.592 and $50.720, with support at $49.670 and $49.230. Upcoming U.S. releases include the Empire State manufacturing survey on Monday, October retail sales on Tuesday and minutes from the Fed’s October meeting on Wednesday, Nov. 18.