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Gold prices retreated as rising bond yields, a stronger dollar and elevated oil prices overcame buying interest, according to precious metals analysts at Heraeus. Their latest update also described a weak opening to the third quarter for silver production in Mexico, the world’s largest silver producing country.

Heraeus said gold broke support near $4,250 per ounce, a level that survived several tests during September. It then traded around $4,100 to $4,200 per ounce, putting the lows near $4,000 per ounce so far this year in focus as the next major support area.

The retreat followed several weeks of relative resilience despite an increasingly difficult macroeconomic setting. However, the combination of expensive energy, elevated yields and dollar strength ultimately outweighed demand around the former support level, the analysts wrote.

Brent traded near $100 a barrel for much of the week. Heraeus said this reinforced concerns that energy costs could keep inflation elevated and monetary policy tighter for longer, adding another source of pressure for the yellow metal.

Diplomatic developments offered little relief from those oil concerns. President Trump rejected Iran’s seven day plan to reopen the Strait of Hormuz, while Tehran was weighing a US counterproposal that would bring its nuclear programme into the initial steps.

The 10 year Treasury yield climbed above 5.3%, reaching its highest level since 2002. The 10 year real yield also moved above 2.9%, increasing the opportunity cost associated with holding gold, which does not generate a yield.

At the same time, expectations for a Federal Reserve rate increase at the October meeting dropped considerably. That shift followed Wednesday’s personal consumption expenditures data and Friday’s employment report.

Headline personal consumption expenditures inflation held at 3.4% from a year earlier in August, while the core reading remained at 3.0%. Those results came in below expectations of 3.7% and 3.3%, respectively.

Heraeus said annual revisions, including methodology changes that reduced previously reported inflation, partly amplified the apparent decline. September nonfarm payrolls then came in at 29,000, far below the expected 90,000, while figures for July and August were revised downward.

Those developments pushed the implied probability of a rate increase at the October 28 Federal Open Market Committee meeting to around 17% on October 2. The probability had stood above 70% early in the previous week.

The analysts also highlighted a major mining sector development after Northern Star rejected a takeover proposal from Gold Fields. The proposed transaction was valued at A$38.7 billion and represented a 22% premium to Northern Star’s closing share price before the approach.

Northern Star declined to engage further because it said the proposal undervalued the company. Had the transaction been completed, the combined group would have produced around 4.1 moz of gold in the 12 months to June 2026, equal to roughly 3.3% of 2025 global mine supply.

Heraeus said the approach demonstrated consolidation pressure across the gold mining sector as producers seek greater scale and reserves with longer lives. Spot gold remained near session lows early in North American trading and last changed hands at $4,135.54 per ounce, down 0.12% on the daily chart.

In silver, Mexican production increased to 10.56 moz in July from 10.38 moz in June, according to the latest survey based statistics from INEGI. That represented a monthly increase of 1.7%, although the extra day in July meant daily production was slightly lower.

Output also remained 2.3% below the 10.81 moz recorded in July 2025. Mexico’s broader mining and metallurgical sector grew 3.8% from the previous month in July but remained 3.9% lower from a year earlier on a seasonally adjusted basis.

Mexico accounted for around 20% of global mined silver supply in 2025, producing 172.9 moz from a worldwide total of 846.6 moz. The Silver Institute expects Mexican mined supply to return to modest growth during 2026 following weaker production at several major operations last year.

Still, Heraeus warned that the recovery would probably remain uneven because July marked the second lowest monthly total of the past year and production remained below the previous year’s level. Spot silver last traded at $60.987 per ounce, up 1.02% on the daily chart.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.