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Spot gold and silver prices sank in late U.S. trading Friday as a technology led equity selloff intensified liquidation across precious metals. Gold traded near $3,879.90 an ounce, down $141.60, or 3.52%, while silver stood near $49.015, down $3.150, or 6.06%.

The decline came even as Treasury yields fell and geopolitical uncertainty rose, conditions that ordinarily support bullion. Crude oil climbed more than 2% after another tanker attack in the Strait of Hormuz, stoking inflation concerns and expectations for restrictive Federal Reserve policy.

Friday’s economic reports offered a mixed picture of moderating wage growth and weakening regional manufacturing activity. The employment cost index increased 0.8% in the third quarter, matching expectations and slowing from 0.9% during the second quarter.

The October Chicago purchasing managers’ index declined to 55.3 from 58.8 in September, missing expectations near 56.1. The reading nevertheless remained above the 50 point threshold separating expansion from contraction.

Those softer figures followed a stronger than expected third quarter gross domestic product report Thursday. The U.S. economy expanded at a 3.4% annualized pace, compared with 2.2% in the second quarter, while September headline personal consumption expenditures inflation accelerated to 3.6% annually.

Core PCE inflation increased to 3.1%, reinforcing concerns about persistent underlying price pressure. Markets remained caught between resilient economic growth, stubborn inflation and an increasing risk of financial market instability.

The Federal Reserve left its benchmark interest rate unchanged Wednesday at 3.75% to 4.00%. Two policymakers favored an immediate 25 basis point increase, while interest rate futures continued to reflect substantial expectations for further tightening in December.

Treasury yields fell as investors sought the relative safety of government bonds during the equity selloff. The benchmark 10 year yield retreated toward 4.93%, while the two year yield approached 4.58%, but gold continued falling as liquidation and restrictive policy expectations outweighed immediate safe haven demand.

Energy market uncertainty intensified after another commercial tanker was attacked in the Strait of Hormuz. The vessel was struck by explosive devices attached to its hull by a small boat, and responsibility for the attack had not been established.

The incident renewed concerns about possible disruptions to Middle Eastern energy exports. Markets were also assessing the possibility of additional military action after the Nov. 3 U.S. midterm elections as negotiations involving Washington, Tehran and regional mediators remained without a confirmed settlement.

December Brent crude gained $2.76, or 2.4%, to settle at $117.64 a barrel after touching $118.00 intraday. January Brent advanced $2.63 to $113.43, while Nymex WTI rose $2.12, or 2.08%, to settle at $104.12.

Brent gained approximately 13.6% during October, while WTI rose 15.2%. Higher oil prices increased concerns about inflation and restrictive monetary policy, even as the Hormuz attack reinforced underlying geopolitical demand for gold.

Silver suffered considerably steeper losses as weakness in precious metals collided with concerns about industrial demand, equity valuations and restrictive financing conditions. The widening gold silver ratio reflected silver’s greater sensitivity to deteriorating risk sentiment and worries about manufacturing activity.

North American equity markets also finished sharply lower. The Dow Jones Industrial Average declined approximately 1.1%, the S&P 500 fell 1.8%, and the Nasdaq Composite dropped 2.9% as weakness in semiconductor and major technology shares dominated trading.

Intel plunged nearly 29% after disappointing profit guidance, while concerns about Amazon’s capital spending added pressure. Technically, gold faced resistance from $3,890.00 to $3,910.00 and support from $3,780.00 to $3,800.00, while silver faced resistance from $51.000 to $52.000 and support at $49.000.

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.