Gold and Silver Rally as Treasury Yields Drop Amid Equity Selloff

The benchmark 10-year Treasury yield slipped toward 5.08%, marking a three-week low as investors retreated from technology-heavy equities. The selloff, fueled by doubts regarding the sustainability of the AI-driven market rally, triggered a flight to government bonds and bullion. Spot gold climbed 1.05% to $4,147.50 an ounce, while spot silver gained 1.99% to trade near $56.620.

Economic data released Thursday painted a complicated picture for the Federal Reserve. September producer prices surged 1.3%—the largest monthly gain since March 2022—driven heavily by a 10.8% spike in energy costs. This follows Wednesday’s CPI data showing annual inflation at 3.7%. While retail sales also exceeded forecasts at 0.8%, Fed funds pricing currently suggests only a 29% probability of an October rate hike, keeping a pause as the base case for policymakers.

Geopolitical tensions in the Strait of Hormuz continue to underpin defensive demand for gold, even as crude prices retreated. While Brent and WTI oil benchmarks eased on reports that Washington may ease tanker sanctions, the sinking of vessels following projectile attacks maintains a volatile security environment. Meanwhile, global equity markets remain under pressure, with Japan’s Nikkei 225 dropping 4.9% and Nasdaq futures signaling further weakness ahead of the U.S. market open.