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.

Spot gold and silver fell sharply in late U.S. trading Thursday as renewed Middle East tensions pushed crude oil higher, intensifying inflation concerns and expectations for additional Federal Reserve tightening. Falling Treasury yields and a steep technology selloff failed to generate lasting defensive demand for bullion.

Gold traded near $4,021.20 an ounce at the latest verified late afternoon reading, down $119.10, or 2.88%. Silver stood near $54.440, down $3.410, or 5.90%, as concerns about industrial demand added pressure.

Investors were forced to weigh persistent inflation against weaker economic activity and growing instability across financial markets. September consumer inflation increased 0.6% from the previous month and 3.7% annually, while producer prices rose 1.3% and 6.3%, respectively.

Fed funds futures indicated approximately an 84% probability of no change at the Federal Reserve meeting on Oct. 27 and 28. Markets assigned a 16% probability to an increase of 25 basis points, while December tightening remained the central expectation.

Treasury yields declined Thursday as selling in technology shares encouraged demand for government bonds. Yet lower yields did not rescue gold, leaving liquidation pressure, precious metals positioning and expectations for restrictive monetary policy as dominant considerations.

The Federal Reserve remained in its premeeting communications blackout. Attention shifted to Friday’s preliminary October manufacturing and services purchasing managers’ indexes at 9:45 a.m. EDT and the final University of Michigan consumer sentiment survey at 10 a.m. EDT.

Those reports are expected to provide further evidence about business activity, consumer confidence and inflation expectations ahead of the monetary policy decision. September personal consumption expenditures inflation data, scheduled for Oct. 29, will provide another major test of expectations for December tightening.

Softer activity readings and easing inflation expectations could reduce pressure on yields and improve gold’s outlook. Stronger economic data and persistent price pressures would instead reinforce expectations for additional interest rate increases.

The Strait of Hormuz remained a significant source of uncertainty as renewed attacks on commercial shipping and energy infrastructure raised concerns about regional escalation. Reports of damaged vessels and threats to maritime traffic were accompanied by fresh security concerns involving Saudi Arabian energy facilities.

Washington and Tehran remained divided over the conditions for reopening normal commercial shipping through the strait. Diplomatic contacts had not produced a confirmed settlement, while uncertainty about additional military action complicated efforts to stabilize the corridor.

Alternative pipelines, rerouting and ship to ship transfers helped restore aggregate Middle Eastern oil exports. Direct tanker movements through Hormuz remained substantially disrupted, sustaining an elevated geopolitical risk premium in crude oil despite the partial recovery in regional exports.

For gold, the escalation created competing forces. The prospect of further military confrontation supported defensive demand, but rising crude prices threatened to prolong inflation and increase pressure on the Fed to keep monetary policy restrictive.

Silver performed worse as the precious metals decline coincided with weaker equity markets and worries about industrial demand. High energy costs, slowing activity sensitive to interest rates and persistent inflation risks continued to complicate the outlook for both metals.

North American equities finished mixed to sharply lower. The Dow Jones Industrial Average gained 11.89 points, or less than 0.1%, to 52,867.98, while the S&P 500 dropped 93.74 points, or 1.21%, to 7,663.43, its largest daily decline since July.

The Nasdaq Composite plunged 694.00 points, or 2.60%, to 26,008.86 amid concerns about the financing and profitability of artificial intelligence investment. The Russell 2000 gained 3.01 points, or about 0.11%, to 2,784.03.

European equities also closed lower as rising oil prices, weaker corporate earnings sentiment and government finance concerns weighed on markets. The Stoxx 600 fell about 1.05%, Germany’s DAX lost around 1.1%, France’s CAC 40 declined about 1.4%, and Italy’s FTSE MIB dropped roughly 2.5%.

Brent crude traded above $113.00 a barrel during the U.S. session, while WTI approached $100.00. The U.S. dollar remained comparatively firm, further limiting gold’s ability to benefit from declining bond yields.

Gold faced resistance at $4,068.00 and $4,079.00, with higher targets at $4,124.25 and $4,142.00. Support was identified at $4,038.00 and the psychologically important $4,000.00 area.

Silver faced resistance at $55.410 and $56.340, followed by $56.920, $57.390 and $57.870. Support was seen at $54.750, while additional downside support had not yet been established after the latest selloff.

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.