Spot gold dipped 0.48% to trade near $4,265.30 an ounce, while silver faced steeper losses, falling 1.34% to $63.470. The selloff follows a strong September flash PMI report, which indicated the fastest private-sector growth in over five years, coupled with weekly jobless claims of 197,000—a figure that reinforces the case for a hawkish monetary policy. Rate futures now suggest a 70% probability of a 25-basis-point increase in October.

Energy markets remain a primary driver of this shift. Brent crude rose to $104.71 a barrel as U.S.-Iran negotiations over the Strait of Hormuz stalled, exacerbating inflation concerns. This energy-led pressure is pushing 10-year Treasury yields toward 5.1% and keeping the U.S. dollar index near a two-month high, creating a difficult environment for non-yielding assets. Investors are now bracing for upcoming data on new-home sales and durable goods orders, which will determine if the recent metals retreat accurately reflects the current interest rate trajectory.