Gold steadies after steep weekly drop as yields climb

Gold traded near $3,883.40 an ounce, up $7.00 on the session. Silver was near $48.630, down $1.320. Persistent inflation concerns, firming yields and a comparatively strong U.S. dollar weighed on bullion, although bargain hunting helped gold recover some ground. Silver also faced concerns about industrial demand and restrictive financial conditions.

The Labor Department reported that the producer price index rose 0.3% in October, below expectations for a 0.4% increase. Annual producer inflation accelerated to 6.5%, its highest since November 2022. Goods prices rose 0.5% and services prices 0.2%; the index excluding food, energy and trade services advanced 0.5%. The figures followed stronger-than-expected consumer inflation data Tuesday and an October jobs report showing 165,000 jobs added and unemployment falling to 4.1%.

Markets remained focused on the Federal Reserve’s Dec. 8-9 meeting. The latest independently verified prerelease futures assessment put the probability of a 25-basis-point increase at 89%, and a 50-basis-point move at 11%. The 10-year Treasury yield rose toward 5.15%, raising the opportunity cost of holding bullion. Next week’s October retail sales report and release of the Fed’s October meeting minutes could influence rate expectations. Stronger spending or hawkish commentary could reinforce expectations for tightening; weaker demand could support gold if yields fall.

Geopolitical risks around the Strait of Hormuz and U.S.-Iran relations added uncertainty. Washington continued its naval blockade of Iran, while signaling that renewed large-scale military action was not its immediate priority. President Donald Trump said Thursday that a diplomatic agreement with Tehran was no longer necessary. Attacks attributed to Iranian-aligned Houthi forces against Saudi energy infrastructure and threats to commercial tankers kept regional supply risks in focus. Such uncertainty can support defensive demand for gold, while higher energy costs may also strengthen inflation and rate concerns.

Oil benchmarks were mixed: Brent settled nearly unchanged at $95.84 a barrel, and Nymex WTI fell about 0.2% to $88.56. Both posted a second consecutive weekly loss. The International Energy Agency’s forecast of a fourth-quarter global supply surplus and an unexpected rise in U.S. crude inventories offset some of the Gulf-related risk premium.

In North America, the Dow rose about 0.1% to 52,347.55, while the S&P 500 fell 0.4% to 7,561.67, the Nasdaq Composite lost 0.9% to 25,136.27 and the Russell 2000 dropped 0.3% to 2,790.49. All four indexes nevertheless ended the week higher. Canada’s S&P/TSX Composite slipped 31.29 points, or 0.09%, to 36,105.90. European markets finished mixed to lower after Thursday’s record levels; the Stoxx 600 remained on course for a weekly gain after four consecutive sessions of advances. Exact final closing-auction values for major European indexes could not be independently reconciled.

For gold, the next upside objective cited in the report was a return above the $3,903-$3,934 resistance zone, with $3,970.14 identified as a further resistance reference. The downside objective was a break below $3,852, followed by targets at $3,823 and $3,821.99. For silver, resistance was identified at $49.670-$50.720, with further levels at $51.480 and $51.950; downside levels included $49.230 and $48.650.