Spot silver surged 2% in early Monday trading as a sluggish U.S. payroll report cooled expectations for an October interest rate hike. While the cooling labor market provided a tailwind for precious metals, gold’s advance remained constrained by stubbornly high Treasury yields and a persistent, firm U.S. dollar.
September’s nonfarm payrolls rose by just 29,000, while revisions to July and August figures slashed 60,000 jobs from previous estimates. This data shift has pushed the market toward pricing in a pause for the October Federal Reserve meeting, with an 82% probability currently assigned to no rate change. Despite this, the potential for a December increase remains on the table, fueled by persistent inflation and elevated energy costs.
Gold is currently trading near $4,154.60 an ounce. Investors are now turning their attention to a heavy week of economic indicators, including S&P Global and ISM services PMIs, September Fed minutes, and weekly jobless claims. These reports will be critical in determining whether the current bid for bullion persists or if resilient services demand continues to bolster yields against non-yielding assets.
Geopolitical risks in the Strait of Hormuz continue to underpin defensive demand, even as crude prices retreat from recent highs. Although Brent crude remains above $100 a barrel, recovering regional exports and coordinated emergency stock releases have partially eased immediate supply fears. Analysts remain cautious, noting that the risk premium is unlikely to vanish until a concrete U.S.-Iran diplomatic path emerges. For now, market sentiment remains defensive, with U.S. stock-index futures tracking lower as high bond yields dominate the cross-asset landscape.
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