Precious Metals Gain as Yields Ease and Dollar Softens

Precious metals like gold and silver saw gains in late U.S. trading on Tuesday, as Treasury yields retreated from their recent highs and the U.S. dollar softened. Spot gold rose 0.63% to near $4,165.40 an ounce, while spot silver climbed 0.53% to around $61.260. The pullback in yields and the dollar provided metals with room to extend their rebound following the post-payroll report.

North American equities also ended higher, driven by optimism around AI-linked earnings and lower yields, which offset lingering inflation concerns. The S&P 500, Dow Jones, and Nasdaq all posted gains, with the S&P 500 reaching a record high of 7,818.93. European equities followed suit, closing higher as bond yields eased and crude prices retreated from recent peaks.

The market remains cautious, with positioning less hawkish at the front end but still defensive at the long end. September payrolls rose by only 29,000, and the unemployment rate held steady at 4.2%. However, the ISM services prices index hit its highest level since July 2022, keeping inflation concerns alive. The probability of an October rate hike stands at 19% to 23%, with December still carrying a higher likelihood of at least one additional increase.

Geopolitical tensions in the Strait of Hormuz continue to pose a supply-risk overhang, but crude flows have been recovering. The Group of Seven’s planned emergency stock release and improving Saudi flows have helped cool the immediate blockade premium. Brent crude traded near $100.58 a barrel, while WTI was near $89.44. Lower crude prices and yields supported gold and equities, but unresolved shipping risks kept a defensive bid under bullion.