Gold drops below $4,000, silver tumbles as Hormuz attack lifts oil prices - Kitco AM Report

Key Points:

• Spot gold and silver prices dropped sharply in early U.S. trading Friday, with gold falling below $4,000 an ounce and silver reaching its lowest level of the year, pressured by renewed attacks on commercial shipping in the Strait of Hormuz and rising crude oil prices.
• U.S. employment cost data showed some moderation in labor-related inflation pressures, with slower wage growth in Q3, but annual compensation increases remain above levels consistent with the Federal Reserve's inflation targets.
• The U.S. economy grew at a robust 3.4% annualized rate in Q3, supported by strong consumer spending and business investment, while inflation measures remained elevated, complicating prospects for easier monetary policy.
• Renewed tanker attacks in the Strait of Hormuz heightened geopolitical risks, pushing Brent crude toward $117.15 a barrel and WTI near $103.79, reflecting market concerns over Middle Eastern energy supply disruptions ahead of the U.S. midterm elections.
• Despite geopolitical tensions supporting defensive demand for gold, persistent inflation concerns, expectations of further Federal Reserve tightening, and broader precious metals liquidation have kept prices under pressure, with silver particularly vulnerable due to industrial demand worries.