Metals retreat as Treasury yields and oil market risks persist

The September employment report showed nonfarm payrolls rising by just 29,000, significantly undershooting expectations of 90,000. This cooling labor market saw the probability of an October Federal Reserve rate hike plummet from 70% to roughly 22%. Despite this shift in sentiment, the 10-year Treasury yield hovered near 5.25%, keeping a firm lid on non-yielding assets like gold and silver. Spot gold traded at $4,142.00 an ounce, a 0.83% decline, while silver fell 1.04% to $60.230.

Equities painted a different picture, with North American and European markets rallying on the prospect of a less aggressive Fed. However, the precious metals sector remained caught between conflicting signals. While lower crude oil prices—driven by potential supply releases—reduced inflationary pressures, the geopolitical risk surrounding the Strait of Hormuz kept a floor under defensive demand. Traders are now looking toward upcoming CPI and PPI data to determine if the payroll slump signals a broader trend or a temporary deviation in the Fed's tightening path.