NEW DELHI: Precious metals are having a rough run, with the latest sell-off taking gold to a one-year low and pushing silver below the $50-an-ounce mark for the first time since almost a year.Rising energy prices and stubborn inflation concerns are weighing on investor sentiment, with expectations growing that US interest rates could stay higher for longer. Both metals extended their monthly losses on Friday, with silver taking a sharper hit.Gold continued its downward journey on Friday, with spot prices falling 2.7% to $3,910.53 per ounce. This was the metal’s lowest level since October 2025. US gold futures for December delivery also slipped 2.8% to $3,919.60 per ounce.Bullion prices have declined 5.9% so far this month and are on track to record their second consecutive monthly fall.Silver fared worse, with spot prices dropping 5.8% to $49.34 per ounce. The decline took the metal below the $50 mark for the first time since November 2025, bringing it to its lowest level since that month.
Why are precious metal prices falling?
The prospect of interest rates staying elevated for longer is putting pressure on precious metals. Higher energy prices have added to inflation concerns, prompting central banks to maintain a cautious stance on monetary policy.Major central banks kept interest rates unchanged this week, but their indications suggested that the tightening cycle may not be over. The US Federal Reserve and the European Central Bank both flagged inflation risks stemming from surging energy costs.“Ongoing concerns about inflation have multiple central banks continuing to tilt hawkish,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.“Even though holds were delivered by major central banks this week, the indication was that the higher-for-longer theme prevails, and that’s weighing on precious metals.”US inflation data released on Thursday further strengthened these concerns. Inflation accelerated in September as consumers paid more for gasoline and other goods, bolstering economists’ expectations of an interest rate hike in December.
Tech stock sell-off adds to precious metals pressure
The sharp decline in technology stocks may have added to the pressure on precious metals, with analysts at Commerzbank pointing to the possibility of forced selling and margin calls following the tech stock sell-off.However, the analysts believe the fall in precious metal prices has been excessive and expect a recovery.“We consider the fall in precious metal prices to be exaggerated and continue to expect a recovery,” they added.The tech-heavy Nasdaq was also poised for steep losses at Friday’s opening as concerns over artificial intelligence spending weighed on technology stocks.Meanwhile, oil prices continued to climb and were headed for a fourth consecutive monthly gain. Rising energy costs have strengthened expectations of interest rates remaining elevated for an extended period, making non-yielding assets such as gold less attractive.
Asian gold demand remains subdued
Weak physical demand in key Asian markets has added to the challenges facing gold.Back at home, buyers held back from making purchases this week, expecting prices to decline further.Meanwhile, demand in China, the top gold-consuming country, also remained muted, offering little support to the market.The sell-off extended to other precious metals as well. Platinum prices dropped 4% to $1,428.35 per ounce, their lowest level since September 2025.Palladium fell 3.1% to $975.25 per ounce, touching its lowest level since June 2025. Both metals were poised to register declines for the week as well as the month.
