Gold Climbs as Oil Drops and Yields Ease Amid Rate Hike Uncertainty

Gold prices rose in early US trading on Tuesday, supported by easing US Treasury yields and a decline in oil prices below $100. Spot gold was up 0.15% at $4,145.67 an ounce, while spot silver saw a slight dip of 0.4% to $60.77 an ounce. The metals complex has faced pressure from rising bond yields and a stronger US Dollar, but oil's retreat helped sustain their rebound.

The likelihood of an October rate hike has diminished following weak September payrolls, though inflation pressures keep the possibility of a December hike alive. Markets currently assign a 78% chance of the Federal Reserve maintaining rates at its October 28 meeting. Upcoming signals from Fed speakers, meeting minutes due Wednesday, and Friday's consumer sentiment report will shape the outlook for gold and silver.

Geopolitical risks around the Strait of Hormuz persist, but regional oil exports have returned to pre-Iran war levels. The Group of Seven agreed to release 100 million barrels of oil from reserves, further boosting supply. Lower oil prices could ease inflation, benefiting gold as yield pressures subside. Global stock markets showed positive risk appetite, with the Dow Jones, S&P 500, and Nasdaq all gaining ground.

For gold, a breakout above the resistance zone of $4,203.61 to $4,230.51 could lift prices to the next resistance level at $4,319.61. Conversely, a drop below support at $4,103.52 may push prices down to $3,996.06. Silver needs to surpass the resistance zone of $61.744 to $63.060 to reach higher levels, while a drop below $59.960 could see prices fall to $58.940.