Gold and Silver Prices Drop as Treasury Yields Rise and Fed Rate Hike Expectations Grow

Spot gold and silver prices fell sharply in late U.S. trading on Thursday, pressured by rising Treasury yields, a firm dollar and expectations of additional Federal Reserve rate hikes. Gold slipped to about $3,876.40 an ounce, down $110.60 (2.77%), while silver dropped to roughly $49.93 an ounce, a decline of $1.61 (3.13%).

U.S. data released Thursday showed mixed signals: initial jobless claims rose to 200,000 for the week ended Nov. 7, slightly above expectations, while October existing-home sales fell 5.5% to a seasonally adjusted annual rate of 3.75 million, the weakest since August 2010, as mortgage rates above 7% curbed demand. The figures followed a consumer-inflation report that showed headline prices up 0.4% and core prices up 0.3% in October, suggesting that higher borrowing costs are limiting housing activity but have not yet eased inflation.

Market positioning remained focused on further Fed tightening, with futures indicating an about 85% chance of a 25-basis-point increase at the Dec. 8-9 meeting and a 15% chance of a 50-basis-point move. Treasury yields rose sharply, the 10-year yield reaching roughly 5.102% and the two-year yield climbing to 4.862%, reinforcing pressure on precious metals. The dollar stayed strong, adding to the headwinds.

President Donald Trump signaled that Washington is no longer pursuing a negotiated settlement with Iran, reviving concerns about the Strait of Hormuz and prompting a rebound in crude oil prices. Nymex WTI futures rose about 2.6% to $88.74 a barrel and Brent crude gained roughly 3.3% to $95.82, despite reported increases in U.S. petroleum inventories.

North American equity markets closed lower, with the Dow Jones Industrial Average down about 0.4% at 52,297.09, the S&P 500 down 0.4% at 7,592.40 and the Nasdaq Composite slipping 0.4% to 25,366.09. The declines were compounded by rising Treasury yields and concerns over technology-sector valuations after Nvidia co-founder Jensen Huang resigned as chief executive.

Canadian stocks also fell, led by weakness in technology and precious-metal shares, while European markets edged higher, buoyed by corporate earnings and gains in industrial and consumer stocks despite ongoing inflation worries.

Technical analysis noted that gold bulls aim to retest the $3,896-$3,944 resistance zone, while bears target a break below $3,852.10. Silver bulls look to move above the $50.12-$51.14 zone, with bears eyeing a break below $49.59.