Brent crude traded near $104.75 a barrel and spot gold near $4,128 an ounce in early U.S. trading on Thursday, after another tanker strike and a shutdown of Gulf of Mexico output. Kitco marked gold at about $4,128.20, up 0.45% on the session, and silver at about $58.83, down 1.40%. Nymex WTI was near $92.28. Brent had already pushed above $101 on Wednesday. Vantage Markets said gold was up 0.5% at $4,131 early Thursday after falling 1.3% the day before to its lowest since early August, a nine-week low.
Oil is lifting yields, and yields are the gold story
Kitco said a tanker was hit north of Qatar and that attacks on vessels around the Gulf and the Strait of Hormuz reached their highest weekly pace since the Iran war began. Hurricane-related shutdowns left about a quarter of current Gulf of Mexico oil output offline. The 10-year Treasury yield was near 5.3%. Dow futures were down about 462 points before the open. Higher oil would normally help gold as a geopolitical hedge. Thursday's transmission ran through inflation expectations instead: oil rose, yields rose, and silver and equities weakened. Minutes released Wednesday said most Federal Reserve officials still saw another rate increase as likely appropriate by year-end. Gold pays no interest, so a 10-year near 5.3% is the cost of holding it. On Sunday Brent was near $102.70 and gold near $4,138, with a G7 plan to release 100 million barrels still in the background. Thursday's oil price is higher than that Sunday mark, and bullion is not. Spot Bitcoin ETFs lost $484.9 million on Wednesday as the same yields and energy prices hit risk assets. See the year-end hike bias in the minutes, bitcoin's ETF outflow, and Sunday's oil and gold piece.