- Gold prices fell to below $4,000 per ounce, marking a one-year low as inflation concerns and a tech selloff weighed heavily on the market.
- The FOMC held rates steady this week, with both the Federal Reserve and the European Central Bank warning of higher inflation due to rising energy prices.
- Gold futures settled at $3,884.90 per ounce, while silver closed at $49.097 per ounce, reflecting declines of 2.7% and 8.6% respectively for the week.
- In September, the FOMC hiked rates for the first time in over three years, contributing to the current market pressures on gold and silver.
- Higher rate environments tend to weigh on non-yielding assets such as gold, which has been further pressured by a decline in U.S. equities.
Gold prices fell to a one-year low on Friday, settling at $3,884.90/oz, while silver slipped below $50/oz for the first time since November. This decline is attributed to rising inflation concerns and a significant selloff in technology stocks.1245
The Federal Open Market Committee (FOMC) held interest rates steady this week, maintaining a benchmark rate of 3.75%-4%. Chair Kevin Warsh indicated that more data would influence the December rate decision, yet the prevailing sentiment suggests a higher-for-longer theme, which is weighing heavily on precious metals.36
Gold was pressured by a combination of factors, including elevated oil prices due to geopolitical tensions in the Middle East and Russia-Ukraine conflicts. Crude oil prices surged over 2% following attacks in the Strait of Hormuz, exacerbating inflation worries. Data showed U.S. inflation accelerated in September, with consumers facing higher prices for gasoline and other goods, reinforcing expectations for a rate hike in December.
Market analysts noted that the recent tech selloff, particularly in the Nasdaq, contributed to the decline in precious metals. David Morrison, a senior market analyst, remarked, “Gold and silver have both cratered this morning... it really feels as if neither precious metal can catch a break at the moment.” Additionally, Peter Grant from Zaner Metals stated, “Even though holds were delivered by major central banks this week, the indication was that the higher-for-longer theme prevails.”
For the week, gold and silver declined 2.7% and 8.6%, respectively, reflecting the ongoing market volatility and inflationary pressures.
“Gold futures settled at $3,875.55/oz, down 3.6% for the session and 6.8% for October, while silver dropped 5.9% to $49.097/oz. Analysts cite hotter-than-expected U.S. inflation data and a tech-heavy Masdaq plunge of nearly 3% as key pressures.”
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