(Kitco NewsWire) - Spot gold and silver prices are sharply lower in early U.S. trading Friday, after a much stronger-than-expected August employment report lifted Treasury yields, firmed the U.S. dollar and revived expectations that the Federal Reserve could raise rates later this month. At the time of writing, spot gold was trading near $4,402.40 an ounce, down 1.56%, while spot silver was trading at $65.590, down 1.87% on the session.
The latest positioning shifted back against precious metals after nonfarm payrolls rose by 162,000 in August, far above expectations near 53,000 to 55,000, while the unemployment rate held at 4.1%. Revisions added 55,000 jobs to June and July, reversing the prior signal that July payrolls had contracted. The report undercuts the Waller-led pause trade that supported gold Thursday and gives the Fed more room to focus on inflation, especially with oil still elevated and next week’s CPI report due Sept. 11. September hike odds moved back toward the low-50% area, the 10-year Treasury yield remained near the 4.8% area and the dollar firmed after the release. For gold, the rate signal is negative: the labor data did not deliver the soft-growth confirmation bulls needed, and the next test is whether CPI keeps inflation risk high enough to validate the Fed-hike repricing.
Gold and silver remain caught between safe-haven demand and the rates channel, but the morning’s payrolls print put yields back in control. Gold broke below $4,422 and briefly traded near $4,380, erasing much of Thursday’s Waller-driven rebound. Silver fell through the $66.00 area and moved back toward the $65.26 support level. The technical damage is not as severe as Tuesday’s selloff, but the setup has shifted from recovery to retest. Bulls need yields and the dollar to fade quickly or risk another push toward the lower support ladders.
The Strait of Hormuz remains the main geopolitical channel into oil, inflation expectations and defensive demand. Ship traffic remains low through the waterway after recent U.S.-Iran exchanges, while wider regional tension has kept crude oil elevated and pushed U.S. diesel prices to record levels. Brent crude is trading above $95 a barrel and WTI remains above $92, with markets still pricing a supply-risk premium tied to Gulf shipping. For gold, the setup remains supportive but conflicted: Hormuz risk underpins defensive demand, but high crude sustains inflation pressure, supports the Fed-hike case and raises the opportunity cost of holding non-yielding metals.
Global markets were mixed after the payrolls release. U.S. stock-index futures softened as the strong jobs print pushed investors back toward a higher-for-longer rate path, though technology shares remained relatively firmer. European equities were little changed to higher before the U.S. open, supported by technology and automaker gains, while Asian markets finished mostly higher. Bond markets remain the cross-asset anchor, with long-end yields still elevated despite Thursday’s relief rally.
The key outside markets see Nymex WTI crude oil prices firmer and trading above $92 a barrel, while Brent crude was above $95. The yield on the benchmark 10-year U.S. Treasury note is trading near the 4.8% area. The U.S. dollar index is firmer. (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.)
Technically, spot gold bulls' next upside price objective is to push prices back above the $4,422.00 resistance level, with a sustained move targeting $4,465.00 and then $4,487.00. Bears' next near-term downside price objective is a break below $4,304.00, with deeper downside targets at $4,263.00 and then $4,221.00. First resistance is seen at $4,422.00 and then at $4,465.00. First support is seen at $4,304.00 and then at $4,263.00.
Spot silver bulls' next upside price objective is to drive prices back above $67.21, with a move above that level targeting $68.74 and then $70.76. The next downside price objective for the bears is a break below $65.26, with deeper downside targets at $63.80 and then $62.57. First resistance is seen at $67.21 and then at $68.74. Next support is seen at $65.26 and then at $63.80.
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