Silver Surges as Weak Jobs Data Shifts Fed Rate Hike Outlook

Spot gold prices saw modest gains while silver surged higher in early U.S. trading on Monday, following a weaker-than-expected U.S. payrolls report. The September nonfarm payrolls report showed only 29,000 new jobs added, with revisions lowering the previous two months' figures by a combined 60,000. This data reduced the likelihood of a Federal Reserve rate hike in October, with markets now pricing an 82% chance of a pause. However, traders still see a possibility of a December rate increase due to persistent inflation and elevated oil prices.

The 10-year Treasury yield hovered around 5.26%, and the 30-year yield near 5.61%, posing a challenge for gold's rebound. The U.S. dollar remained firm, limiting gold's advance despite the shift in Fed expectations. Upcoming economic data, including the S&P Global services PMI and ISM services reports, could influence gold's trajectory. Softer services employment or weaker consumer sentiment could reinforce gold's post-payroll gains, while firmer data might keep yields and the dollar pressuring bullion.

Geopolitical tensions in the Strait of Hormuz remained unresolved, though early pressure on oil markets was eased by recovering Middle Eastern exports and coordinated stock releases. Brent crude held above $100 a barrel, while WTI traded near $90. The risk premium persisted, with recent attacks on vessels near Oman and Yemen highlighting ongoing concerns. Analysts do not expect a preliminary U.S.-Iran deal before early next year.

Spot gold was trading near $4,154.60 an ounce, up 0.36%, while spot silver was near $61.480, up 2.00%. Technically, gold's next upside target is above $4,160.00, with deeper resistance at $4,190.00. Silver's bulls aim to push prices above $61.720, targeting $65.090 next. The bears' downside objectives for gold are below $4,112.00, with deeper support at $4,073.00, while silver's bears target a break below $59.960.