Gold Prices Pressed by Higher Oil and Falling Yields as Silver Output Slips
Heraeus analysts say rising Brent crude and lower Treasury yields are keeping gold near $4,000 per ounce, while Fresnillo's silver production fell 5.5% in Q3 2026.
Gold prices are being constrained by higher oil prices even as lower Treasury yields provide some support, according to precious-metals analysts at Heraeus. Brent crude has risen above $110 a barrel after recent Houthi attacks in Saudi Arabia, and forward oil for delivery in a year is trading around $89 a barrel, indicating a short-term risk premium and expected disruption into next year. The analysts note that elevated near-term oil prices raise inflation concerns and keep a December Federal Reserve rate hike priced in, offsetting the usual safe-haven demand for gold.
The 10-year Treasury yield has moved back toward 5.0% from about 5.35% earlier in the month, as investors shift toward government bonds amid worries about AI valuations and financing needs. Real yields on inflation-protected securities have fallen from above 2.9% to roughly 2.6%. While lower yields reduce the opportunity cost of holding gold, Treasury yields remain historically high and the dollar stays strong, limiting gold's advance. Spot gold was last quoted at $4,012.31 per ounce, up 0.41% on the day.
Russia's central bank continued to sell gold, disposing of about 6 tonnes in September, marking its tenth consecutive month of sales and reducing reserves to roughly 2,260 tonnes, the lowest level since 2019. The analysts point out that, unlike most central banks that are net buyers, Russia is reducing its gold holdings to ease budget pressures.
On the silver side, Fresnillo reported a 5.5% quarter-on-quarter decline in attributable production to 10.3 million ounces, and an 11.6% year-on-year drop to 11.7 million ounces. The decline reflects lower grades at several mines and the loss of output from the Silverstream project. Over the first nine months of the year, Fresnillo produced 32.4 million ounces, an 11.5% decrease from the same period last year. To meet the lower end of its full-year guidance of 42.0-46.5 million ounces, the company needs to produce about 9.6 million ounces in the fourth quarter.
Silver prices fell below $55 an ounce, breaking July lows, and were trading at $53.77 per ounce, down 0.24% on the day. The analysts warn that a sustained move below $55 could signal further weakness, with $50 serving as the next psychological support level.