(Kitco NewsWire) – Spot gold prices were near steady and spot silver prices were modestly higher in early U.S. trading Friday, as a softer dollar and lower Treasury yields on the week continued to support precious metals following Thursday's rebound. Federal Reserve Chair Kevin Warsh refrained from signaling an October rate increase during overnight remarks at the International Monetary Fund meetings, reducing immediate tightening expectations despite persistent inflation pressure. At the time of writing, spot gold was trading near $4,172.10 an ounce, up $2.30, or 0.06%, while spot silver was trading near $57.630, up $0.330, or 0.57%.

Market positioning remains divided between stubborn inflation and growing concerns about economic resilience. September CPI rose 0.6% on the month and 3.7% annually, while Thursday's producer-price report showed a 1.3% monthly increase and a 6.3% annual gain, the largest monthly rise since March 2022. Producer energy prices jumped 10.8%, adding to concerns that elevated crude and fuel costs could prolong inflation. September retail sales increased 0.8%, suggesting consumer demand remains resilient, while initial jobless claims rose slightly to 199,000.

The inflation data have kept December Federal Reserve tightening expectations elevated, but near-term rate pricing has shifted considerably. Following Warsh's remarks in Bangkok, traders reduced the probability of an October rate hike to roughly 15%, while the probability of a December increase remained near 89%. The 10-year Treasury yield was trading near 5.11%, down approximately 14 basis points on the week, as concerns about debt-financed artificial intelligence investment helped fuel demand for government bonds. The dollar index retreated toward 101.9, easing another source of pressure on bullion.

Friday's September import and export prices, industrial production report and the approach of the Fed's pre-meeting communications blackout are the next immediate considerations. Softer economic data would reinforce the October-pause trade and support gold, while persistent inflation keeps the prospect of additional tightening and renewed yield pressure in place ahead of the Oct. 27-28 policy meeting.

The Strait of Hormuz and U.S.-Iran situation remains a major source of geopolitical and energy-market uncertainty despite another modest decline in crude prices Friday. Attacks on commercial vessels near the strait have intensified in October, with two cargo ships sinking after separate incidents and other vessels reporting projectile strikes. The absence of a durable U.S.-Iran agreement continues to threaten the stability of Middle Eastern exports, even as some regional crude flows have recovered. The International Energy Agency's decision to accelerate the release of approximately 100 million barrels of remaining emergency oil stocks is helping offset immediate supply concerns. However, U.S. crude inventories fell by 8.6 million barrels last week, while hurricane-related production disruptions and lower distillate stocks have added to physical-market tightness. Brent crude traded near $105.26 a barrel and WTI near $97.11.

For gold, the transmission remains mixed: geopolitical insecurity supports safe-haven demand, but elevated oil prices sustain inflation expectations and the risk of higher interest rates. Silver remains more vulnerable to shifts in industrial sentiment, although the weaker dollar is supporting its recovery.

Global equity markets were mixed before the U.S. open as investors assessed Warsh's comments and the outlook for AI-related investment. S&P 500 futures were up 0.2%, Dow futures gained 0.4% and Nasdaq futures slipped 0.1%. Asian equities recovered part of Thursday's sharp losses, with South Korea's Kospi rising 2.1% and Japan's Nikkei 225 gaining 1.4%. European markets were mixed, with Germany's DAX up about 1.0%, France's CAC 40 modestly higher and the U.K. FTSE 100 slightly lower. The stabilization in equities has reduced some immediate defensive demand, but concerns about the financing of large-scale AI infrastructure remain supportive of Treasury bonds.

The key outside markets see Nymex WTI crude oil prices lower and trading near $97.11 a barrel, while Brent crude was near $105.26. The U.S. dollar index is softer and trading near 101.9. The yield on the benchmark 10-year U.S. Treasury note is trading near the 5.11% area. The U.S. dollar index is softer and trading near 101.9. (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 $4,201.00 to $4,217.40 resistance zone, with a sustained move targeting $4,230.51 and then $4,272.41. Bears' next near-term downside price objective is a break below $4,141.97, with deeper downside targets at $4,073.55 and then $4,066.54. First resistance is seen at $4,185.25 and then at $4,201.00. First support is seen at $4,148.26 and then at $4,141.97.

Spot silver bulls' next upside price objective is to drive prices back above the $57.856 to $58.276 area, with a move above that zone targeting $59.370 and then $60.450. The next downside price objective for the bears is a break below $56.920, with deeper downside targets at $56.777 and then $56.340. First resistance is seen at $57.856 and then at $58.276. Next support is seen at $57.390 and then at $56.920.

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