Gold Holds Firm as Fed Bets Soften Amid Elevated Yields

Gold prices held steady on October 1 as the Federal Reserve's rate-hike expectations softened, providing support to bullion despite elevated Treasury yields and a firm US dollar. Spot gold was trading near $4,159.11 an ounce, up 0.10% on the session, while spot silver was near $60.980, up 0.18%. The S&P 500 rose 14.91 points, or 0.19%, to 7,666.45, and the Dow Jones Industrial Average added 20.51 points, or 0.04%, to 50,926.56.

The key driver behind gold's stability is the divergence between easing near-term Fed expectations and stubbornly high long-term yields. The initial jobless claims fell to 197,000, below consensus expectations, reinforcing evidence that the labor market remains resilient ahead of Friday's September employment report. However, Treasury yields continue to dominate cross-asset pricing, with the benchmark 10-year note briefly reaching its highest level in more than two decades before retreating later in the session.

The Strait of Hormuz and US-Iran situation remains an important source of underlying market uncertainty, although the immediate oil-market risk premium eased during Thursday's session. Lower oil prices reduce immediate inflation pressure, providing modest support for gold, although the unresolved geopolitical backdrop continues to underpin safe-haven demand across commodity markets.

Technically, spot gold bulls' next upside price objective is to push prices back above $4,190.00 to $4,210.63 resistance, with a sustained move targeting $4,238.00 and then $4,254.44. Bears' next near-term downside price objective is a break below $4,136.44, with deeper downside targets at $4,112.00 and then $4,073.00.