Silver Leads Precious Metals Rally as Weak Jobs Data Shifts Fed Outlook

On October 5, precious metals saw mixed movements, with silver leading the gains while gold's upside remained capped. Spot gold rose slightly to $4,150.67 per ounce, up 0.25%, while spot silver surged 1.74% to $61.421. The weaker-than-expected U.S. September jobs report reduced the likelihood of a Federal Reserve rate hike in October, but high Treasury yields, a strong dollar, and geopolitical tensions in the Strait of Hormuz limited gold's gains.

The September jobs report showed nonfarm payrolls increased by just 29,000, with the unemployment rate steady at 4.2%. Market consensus now assigns an 82% probability that the Fed will hold rates steady in October, though inflation concerns and elevated oil prices keep a December rate hike in play. U.S. 10-year Treasury yields hover around 5.26%, while 30-year yields are near 5.61%, weighing on gold's performance.

Market attention will focus on upcoming economic data, including the S&P Global Services PMI and ISM Services Index on October 5, Fed meeting minutes on October 6, initial jobless claims on October 7, and the October Consumer Confidence Index on October 10. Weak services-sector employment data or declining consumer confidence could support gold's rally, while strong demand or resilient services could keep yields and the dollar elevated, pressuring precious metals.

The Strait of Hormuz crisis remains unresolved, but oil prices eased slightly due to resumed Middle Eastern exports and coordinated releases from strategic petroleum reserves. Brent crude stayed above $100 per barrel, while West Texas Intermediate (WTI) hovered around $90. Geopolitical risks persist, with attacks on vessels off Oman and Yemen, and analysts expect no U.S.-Iran agreement before early next year. For gold, lower oil prices could ease inflationary pressures, but unresolved security risks continue to drive safe-haven demand.