Analysts at the German precious metals firm Heraeus say that gold prices are currently caught in a tug-of-war: rising oil prices are putting downward pressure on gold, while declining real yields are providing support; meanwhile, the world’s largest primary silver producer saw a decline in silver production in the first three quarters of 2026. Gold Prices Caught in a Battle Between Bulls and Bears: High Oil Prices Offset Lower US Treasury Yields In the latest market commentary, analysts pointed out that gold prices are caught between rising oil prices and falling US Treasury yields, resulting in a stalemate. "After the Houthi attacks on Saudi facilities, Brent crude oil prices have climbed back above $110 per barrel. Furthermore, despite the US blockade, Iranian floating storage crude oil, which had been continuously supplying Chinese refineries, was depleted by mid-October," the analyst stated. "The price of forward crude oil contracts for one-year delivery is around $89 per barrel, indicating that the market believes there is a significant risk premium in the short term, and supply disruptions may continue into next year. For gold, the recent high oil prices have continued to push up inflation risks, and the market has already fully priced in the expectation of a Fed rate hike in December, offsetting the traditional safe-haven buying support from geopolitical tensions." The analyst added that while the decline in US Treasury yields has offset some of the pressure from rising oil prices, it is not enough to drive gold prices higher. "Due to overvaluation in the artificial intelligence sector, huge financing needs, and concerns about investment returns, funds have flowed into US Treasuries, causing the 10-year Treasury yield to fall from around 5.35% earlier this month to around 5.0%. The real yield on Treasury Inflation-Protected Securities (TIPS) has also fallen from above 2.9% to near 2.6%." "Lower yields reduce the opportunity cost of holding gold, but US Treasury yields remain at historically high levels, and the dollar remains strong, diverting safe-haven funds away from US Treasuries," the analyst explained. "Therefore, even with a bull market in bonds, gold prices have still fallen back to around $4,000 per ounce. Only a sustained decline in oil prices, coupled with lower US Treasury yields, can create a more favorable combination for gold; conversely, if Brent crude oil remains strong, inflationary and interest rate hike pressures will continue to suppress gold prices." Russia continues to sell off its gold reserves, and the global trend of central banks increasing their holdings remains unchanged. In addition, Russia continues to sell off its gold reserves to alleviate federal fiscal pressure. "The Central Bank of Russia sold approximately 6 tons of gold in September, marking the tenth consecutive month of reductions. After the reductions, reserves totaled approximately 2,260 tons, a new low since 2019," the report noted. "Since December of last year, Russia's gold reserves have decreased by approximately 62 tons, exceeding the net reduction of approximately 50 tons during the entire year of the 1998 Russian financial crisis." Analysts stated that despite continued sales by Russia and Turkey, central banks worldwide still made net purchases of 170 tons of gold from January to August. "Global central banks increasing their gold holdings remains a major trend; Russia is an exception: its current need to utilize reserve assets exceeds its willingness to increase its gold reserves." Spot gold remained near its intraday high, trading at $4,019.66 per ounce, a daily increase of 0.59%. Fresnillo silver production declined significantly, with ore grades decreasing in many mining areas . Turns attention to the silver market. Heraeus analysts noted that silver production in Fresnillo declined in the third quarter. "Attributable silver production was 10.3 million ounces, down 5.5% from 10.9 million ounces in the previous period and down 11.6% from 11.7 million ounces in the same period last year," the report data showed. "Lower ore grades at the Juani Scipio, Socito, and San Julian mines were the main reason for the production decline; the year-on-year decline was also compounded by the expiration of Silverstream project contributions. The decline was particularly pronounced at the Juani Scipio mine, where attributable silver production fell sharply by 26% year-on-year to 1.8 million ounces, although production at the Fresnillo main mine increased by 5% year-on-year to 2.5 million ounces." The world's largest primary silver miner's total production for the first nine months of this year was 32.4 million ounces, a year-on-year decrease of 11.5%. "The company maintains its full-year production guidance at 42-46.5 million ounces. To reach the lower end of this guidance, 9.6 million ounces of silver would need to be produced in the fourth quarter. At this level, Fresnillo's production accounts for approximately 5% of global mined silver supply, with total global mined silver production projected at 84.66 million ounces by 2025." Silver prices broke down, with the next support level at $50/ounce. Regarding market conditions, Heraeus noted that silver prices fell below $55 per ounce, breaking below the July lows. "Currently, silver prices have fallen more than 20% from the rebound high of nearly $70 at the end of August, and last week's rebound was short-lived," the analyst stated. "If silver prices hold below $55, it means the price trend is weakening further; the next key psychological support level is $50/ounce." Spot silver was quoted at $54.109 per ounce during the session, up 0.37% on the day.