(Kitco NewsWire) - Spot gold and silver prices were lower in late U.S. trading Tuesday, as stronger-than-expected U.S. labor-market and factory orders data lifted Treasury yields and reinforced expectations for additional Federal Reserve tightening. Precious metals remained under pressure despite another decline in crude oil prices, while investors positioned for the U.S. midterm election results and assessed conflicting signals about negotiations to end the confrontation with Iran. At the time of writing, spot gold was trading near $3,924.10 an ounce, down $21.60, or 0.55%, while spot silver was trading near $49.450, down $1.076, or 2.13%, on the session.

Tuesday's U.S. economic reports pointed to renewed strength in labor demand and manufacturing orders, complicating expectations that the Federal Reserve could soon end its tightening cycle. September job openings increased to 7.523 million from an upwardly revised 7.190 million in August, exceeding expectations near 7.15 million and reaching their highest level since May. Hiring remained relatively stable, while layoffs declined to approximately 1.64 million and voluntary quits increased to 3.37 million. The improvement suggests that employers continue to seek workers despite elevated borrowing costs and uncertainty surrounding economic growth. The figures reinforced the argument that labor-market conditions remain sufficiently resilient to accommodate restrictive monetary policy.

September factory orders also exceeded expectations, increasing 1.8% following an upwardly revised 0.3% gain in August. Economists had anticipated an increase of approximately 1.2%. Orders were 7.2% higher than a year earlier, supported by a 28.3% increase in civilian aircraft and parts bookings, while machinery orders advanced 1.5% and computers and electronic products orders gained 0.8%. Nondefense capital goods orders excluding aircraft, a measure of business equipment investment, increased 0.6%, slightly stronger than initially estimated. The results followed Monday's October manufacturing purchasing managers' index of 55.5, reinforcing the picture of continued factory expansion even as elevated input costs and financing conditions remain significant constraints.

Market positioning remains focused on the intersection of resilient economic activity, persistent inflation and Tuesday's U.S. midterm elections. Third-quarter gross domestic product increased at a 3.4% annualized pace, while September core personal consumption expenditures inflation remained elevated at 3.1% annually. The Federal Reserve left its benchmark interest rate unchanged at 3.75% to 4.00% last week, but two policymakers favored an immediate 25-basis-point increase, keeping the possibility of December tightening firmly in consideration. Tuesday's stronger job openings and factory orders data added to those expectations, with the benchmark 10-year Treasury yield rising approximately 5.8 basis points to 4.951%. The dollar also strengthened modestly. Higher yields and continued monetary policy uncertainty weighed on gold, while silver experienced additional selling pressure amid concerns about industrial demand and broader investment positioning.

The U.S. midterm elections introduced another source of uncertainty for bond, currency and precious metals markets Tuesday, with investors assessing whether President Donald Trump's Republican Party will retain control of Congress. Pre-election polling and independent projections favored Democrats to regain control of the House of Representatives, while the Senate remained more competitive. A divided Congress could limit the administration's flexibility to pursue additional fiscal spending or tax legislation, potentially moderating expectations for Treasury issuance and longer-term borrowing costs. Such an outcome could provide some support for gold if yields and the dollar decline, although the effect would depend on subsequent fiscal proposals and investors' assessment of government borrowing requirements. Continued Republican control could preserve greater flexibility for fiscal expansion, potentially increasing longer-term yield pressure. (Gold prices rose an average of 14% in the 12 months following the last 13 midterm elections, according to the new midterm event study from Kitco Research.)

The first U.S. polling places are scheduled to close at 6 p.m. EST, with major groups of states reporting after 7 p.m. and 8 p.m. EST. Markets will assess the emerging congressional balance alongside the possibility that close races and delayed vote counting could postpone a definitive outcome. Attention also turns to Wednesday's ADP private-sector employment report at 8:15 a.m. EST, the September international trade report at 8:30 a.m. EST and the October ISM services index at 10 a.m. EST. Thursday brings weekly jobless claims and preliminary third-quarter productivity figures at 8:30 a.m. EST, followed Friday by the October employment report at 8:30 a.m. EST. Softer hiring and wage data could reduce December rate hike expectations and support gold through lower Treasury yields and a weaker dollar, while resilient employment and continued inflation pressure would reinforce the prospect of additional tightening.

The Strait of Hormuz and U.S.-Iran situation remained a significant source of uncertainty Tuesday, although crude oil prices declined as traders continued to assess the possibility of renewed negotiations despite limited U.S. military strikes against Iranian targets. American forces conducted strikes on Iran's Qeshm Island near the strategic shipping corridor, describing the action as a defensive response to threats against military assets and commercial shipping. The incident initially pushed crude oil prices higher, reversing part of Monday's steep decline. However, subsequent diplomatic developments and indications that both Washington and Tehran were reviewing proposals from regional mediators encouraged another reduction in the geopolitical risk premium.

A senior Iranian official indicated Tuesday that Washington and Tehran remain far from an agreement, while Qatar continued efforts to narrow differences and prevent renewed military escalation following the U.S. elections. The central disputes involve sanctions relief, Iran's nuclear program, the U.S. naval blockade of Iranian ports and the conditions for restoring normal commercial shipping through the Strait of Hormuz. Although Iranian officials have expressed willingness to continue negotiations, no binding agreement has been reached and the possibility of further military action remains unresolved. The continuing security risks, elevated shipping costs and uncertainty surrounding the restoration of normal tanker traffic leave global energy markets exposed to renewed disruption.

Crude oil prices finished lower despite the overnight escalation, as diplomatic hopes and expectations for continued petroleum availability offset some immediate concerns about supply interruptions. Nymex WTI crude oil futures settled at $96.09 a barrel, down 0.4%, while Brent crude futures declined 1.1% to $103.60, extending Monday's sharp losses. For gold, the decline in energy prices reduces some inflationary pressure that could otherwise reinforce expectations for additional Fed tightening. However, stronger U.S. employment data and rising Treasury yields limited the benefit to bullion. Silver remained more vulnerable to concerns about industrial activity, elevated financing costs and continued liquidation following October's sharp correction.

North American equity markets finished mixed Tuesday as renewed buying in semiconductor and artificial intelligence-related shares offset weakness in other major technology stocks ahead of the election results. The Dow Jones Industrial Average declined 0.38% to close at 51,786.72, while the S&P 500 advanced 0.36% to 7,568.92. The Nasdaq Composite gained 0.83% to finish at 25,372.01, supported by gains in semiconductor companies as technology investors returned selectively following recent heavy selling. The Russell 2000 increased approximately 0.2% to 2,812.45. Nvidia advanced around 3%, while Advanced Micro Devices gained approximately 5.1% ahead of its quarterly earnings. Apple declined approximately 2.2% after warning that higher memory-chip costs could pressure profit margins. The divergence among major benchmarks reflected continued sector-specific positioning rather than a broad-based improvement in investor risk appetite.

Canada's S&P/TSX Composite Index finished lower Tuesday, declining 268.81 points, or 0.75%, to close at 35,532.28, underperforming the major U.S. equity benchmarks. Weakness in crude oil and precious metals prices weighed on the resource-heavy Canadian benchmark, while broader concerns about restrictive Federal Reserve monetary policy, elevated borrowing costs and uncertainty surrounding the U.S. midterm elections contributed to cautious investor sentiment. The decline contrasted with gains in the S&P 500 and Nasdaq Composite, reflecting continued divergence across North American equity markets.

European equity markets closed lower Tuesday as weakness in mining, retail and other economically sensitive shares outweighed selective corporate gains. The pan-European Stoxx 600 declined 0.58% to 645.66, while Germany's DAX fell 0.45% to 25,864.62. France's CAC 40 lost 0.34% to 8,020.31, while the U.K.'s FTSE 100 underperformed, falling 1.14% to 10,638.43. Spain's IBEX 35 declined 0.79% to 18,807.20, while Italy's FTSE MIB was little changed, down 0.01% to 49,941.83. Lower metals prices weighed on mining companies, while disappointing corporate developments pressured the retail sector. Investors also assessed the implications of U.S. election uncertainty, higher borrowing costs and the unresolved confrontation involving Iran for European economic activity and corporate profitability.

The key outside markets see Nymex WTI crude oil futures lower and settling at $96.09 a barrel, while Brent crude futures finished at $103.60. The yield on the benchmark 10-year U.S. Treasury note rose to 4.951%, reflecting stronger labor-market data and expectations that Federal Reserve monetary policy will remain restrictive. The U.S. dollar was modestly firmer as traders positioned for the election results and upcoming employment data, adding to pressure on precious metals. (Kitco Global Index shows how much of today's gold move is the dollar versus the gold market itself.)

Technically, spot gold bulls' next upside price objective is to push prices back above the $3,975.00 to $4,084.00 resistance zone, with a sustained move through the upper boundary needed to improve the near-term bearish technical structure. Bears' next near-term downside price objective is a break below $3,871.00, with a deeper downside target at $3,797.00. First resistance is seen at $3,975.00 and then at $4,084.00. First support is seen at $3,871.00 and then at $3,797.00.

Spot silver bulls' next upside price objective is to drive prices back above the $51.270 to $53.280 resistance zone, with a sustained move through the upper boundary needed to improve the near-term technical outlook. The next downside price objective for the bears is a break below $48.850, with a deeper downside target at $47.060. First resistance is seen at $51.270 and then at $53.280. Next support is seen at $48.850 and then at $47.060.

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