Late Thursday US equity session, spot gold and silver prices rallied sharply. Supported by a weaker US dollar, falling crude oil prices and retreating US Treasury yields, precious metals extended their rebound after the Fed’s first rate hike in more than three years. At the close of the North American session, spot gold settled at $4341.2 per ounce, up $78.11 or 1.83% on the day. #GoldMarketWrapup#
(Source: FX168)
Spot silver closed at $65.202 per ounce, gaining 3.54%.
(Source: FX168)
Stocks, Bonds and Oil Drop Together, Gold and Silver Benefit Simultaneously
North American stock markets closed higher on Thursday. Falling oil prices and eASIng pressure in the bond market helped equities recover from the sell-off after Wednesday’s Fed policy decision. The S&P 500 rose 85.95 points, or 1.1%, to 7637.76; the Dow Jones Industrial Average climbed 316.14 points, or 0.6%, to 51778.04; the Nasdaq Composite advanced 439.87 points, or 1.7%, to 26418.30; the Russell 2000 added 15.82 points, or 0.6%, to 2874.63.
European markets also finished higher. The STOXX Europe 600 rose 0.86% to 642.60. The UK FTSE 100 gained 1.19% to 10816.14; Germany’s DAX edged up 0.70% to 25716.71; France’s CAC 40 rose 0.57% to 8186.93; Italy’s FTSE MIB added 0.80% to 52385.50.
Market Reprices After Fed Rate Hike
Current market pricing continues to revolve around the Fed’s rate decision on September 16. The Fed raised the federal funds target range by 25 bASIs points to 3.75% to 4.00%, and officials’ projections still point to at least one more rate hike this year. This means the interest rate environment remains relatively restrictive for gold in the medium term. Nevertheless, Thursday’s trading showed that markets are distinguishing between “priced-in rate hikes” and “new tightening shocks”: falling crude oil prices and retreating Treasury yields reshaped the day’s trading logic.
The benchmark 10-year US Treasury yield dropped from 5.01% late Wednesday to 4.93%, and the US Dollar Index pulled back after its Fed-driven rally. Meanwhile, pending home sales rose 0.3% month-on-month, yet this modest improvement did not change the view that the housing market remains weighed down by mortgage rates near 7%. For gold, this means support exists for a short-term rebound, but if inflationary pressures fail to ease further, Fed guidance may still cap upside for bullion.
Lower Oil Prices Ease Inflation Fears
Oil prices remain a key variable affecting inflation expectations, safe-haven demand and interest rate expectations. Crude fell for the second consecutive trading day on Thursday, as Saudi Arabia is seeking ways to ship more crude via Oman and investors are assessing the possibility of a faster recovery in East-West pipeline capacity. WTI crude settled at $101.91 per barrel, and Brent crude closed at $104.82 per barrel.
Falling oil prices eased immediate inflation pressure and helped push Treasury yields lower, lending support to both gold and equities. Still, risks have not fully dissipated: constrained flows through the Strait of Hormuz, risks to Saudi infrastructure and disruptions to Red Sea shipping continue to form a geopolitical floor for crude prices and offer background support for gold.
External Markets and Key Price Levels
In external markets, Nymex WTI crude traded around $101.91 per barrel, Brent crude near $104.82 per barrel; the benchmark 10-year US Treasury yield stood at roughly 4.93%; the US Dollar Index weakened. The Kitco Global Index shows that both dollar dynamics and gold’s own trend drove price swings on the day.
The core driver behind the rebound in precious metals is that the interest-rate channel finally offered some breathing room. Spot gold reclaimed the $4300 threshold and neared the $4354 resistance level in the latest technical structure; spot silver recaptured $64.86 and tested the resistance zone of $65.73 to $66.99. Even so, this rally cannot yet be regarded as a full technical reversal. Gold needs a sustained break above $4354 to improve its short-term structure and target $4403 and $4434 further up; silver must break the upper end of its resistance range to confirm that this advance is more than a short-covering bounce after the Fed meeting.
For spot gold bulls, the next target is to retake the $4354.00 resistance. A sustained breakout would open upside toward $4403.00 and $4434.00. The near-term bearish objective is a break below $4283.00, followed by $4256.00 and $4215.59. For spot silver, bulls’ next goal is to climb above $65.73; a break above this level targets $66.99 and $68.17. Bears aim for a drop below $63.44, with further downside at $62.38 and $62.06.
Overall, the rebound in gold and silver stems mainly from the simultaneous pullback in the US dollar, oil prices and yields, rather than a complete repricing of the Fed’s tightening path. If oil prices keep cooling and yields stay lower, precious metals may retain support. However, with the Fed still signalling additional rate hikes, upside room may remain limited in the short run.