Gold and silver rally as oil slump eases inflation concerns

Crude’s decline helped ease inflation worries and lifted broader markets, but the labor data point to continued resilience. October nonfarm payrolls rose by 165,000, well above expectations of about 65,000. The unemployment rate edged down to 4.1% from 4.2%; average hourly earnings increased 0.4% month over month and 3.1% year over year. August and September payrolls were revised up by a combined 84,000.

Interest-rate futures put the chance of a 25-basis-point Fed increase in December at about 82.2% in Monday afternoon trading. The 10-year Treasury yield was near 4.86% and the two-year yield near 4.55%. The dollar index slipped about 0.3% to 101.88, offering bullion some support, though expectations for higher U.S. rates limited its retreat.

The Labor Department is due to release October’s consumer price index at 8:30 a.m. EST Tuesday. Economists expect headline prices to rise about 0.3% on the month, compared with September’s 0.6% increase. Investors will focus on core inflation, which excludes food and energy. A softer reading could temper rate-hike expectations and support gold; a stronger one could reinforce the case for further tightening and weigh on precious metals.

Oil fell as traders responded to renewed hopes for a diplomatic resolution to the U.S.-Iran conflict. Brent settled down $5.75, or 5.85%, at $92.57 a barrel; U.S. WTI fell $3.98, or 4.38%, to $86.85. Both benchmarks continued lower after settlement. The outlook for negotiations remains uncertain, with Washington and Tehran still reporting attacks involving shipping in or near the Strait of Hormuz.

Equities also rebounded. The Dow rose 2.15% to 52,389.75, the S&P 500 gained 2.35% to 7,549.94 and the Nasdaq advanced 2.74% to 25,253.14. Silver outperformed gold as buying returned to broader markets, though its industrial exposure leaves it sensitive to manufacturing demand and economic conditions.