Investing.com -- Gold prices slid on Friday, with spot prices touching their lowest level in over a year, amid a bruising rout on Wall Street and a move by traders to safe-haven assets such as U.S. Treasury bonds and the Japanese yen. Gold was also set for a second consecutive monthly decline, as elevated oil prices and inflation concerns maintained expectations for higher interest rates.
Spot gold fell 3.6% to settle at $3,875.55/oz, while gold futures shed 3.6% as well to settle at $3,884.90/oz. The former slumped 6.8% for October, while the latter declined 7.3%.
"Gold and silver have both cratered this morning, and that's despite a sharp selloff in the U.S. dollar. It really feels as if neither precious metal can catch a break at the moment," David Morrison, senior market analyst at Trade Nation, said.
"Yet another way of looking at it is that both are in the process of a full bull capitulation. If so, then it could be that the protracted correction off the all-time highs from the end of January could be coming to an end, as the last of the distressed buyers are forced to cover. At some stage, the selling pressure eases off and it wouldn't take much buying volume to trigger a sharp rebound. But where that may kick in is very hard to establish," he noted.
"Gold is back below $4,000 and once again testing a band of support established back in the summer. Its daily MACD is flattening out underneath the zero line although it may have to consolidate for longer around here to build upside momentum," Morrison added.
For precious metal market participants, attention this month has been largely focused on Federal Reserve rate expectations. Hotter-than-expected U.S. consumer and producer price readings, along with elevated readings of the personal consumption expenditures (PCE) price index - the Fed's preferred inflation gauge - had kept traders on edge ahead of the October interest rate decision.
However, the Federal Open Market Committee (FOMC) this week kept rates steady, with Chair Kevin Warsh saying there was a deluge of data still to be released until the December rate decision. The FOMC had hiked rates in September for the first time in over three years, and markets now expect another hike in December. Higher rate environments tend to weigh on non-yielding assets such as gold. They also tend to strengthen the dollar, which in turn can make bullion more expensive for foreign buyers.
The yellow metal was also pressured by an overall slide in U.S. equities this month, as investors fretted over the artificial intelligence trade amid soaring concerns about debt-fueled AI spending.
Additionally, gold has been subdued amid elevated inflationary shocks from soaring oil prices in October. Supply disruption concerns have dominated energy markets, amid an increase in Iranian attacks on ships transiting the Strait of Hormuz, and an escalating conflict between Iran-backed Houthis and the Saudi Arabia-backed government in Yemen.
The prospect of renewed U.S. military action against Iran after the midterm elections has also put a dampener on efforts for a diplomatic breakthrough between Washington and Tehran.
Roushni Nair and Scott Kanowsky contributed to this article
Original Article
Gold slides in October, spot prices dip under $4k, hit their lowest in over a year
Coal supply is struggling to keep pace with demand
European gas surges 40% in October on U.S.-Iran military escalation
