Gold sinks to a one-year low as Fed hike bets climb
Gold fell nearly 3% to its lowest in more than a year as oil climbed, the dollar rallied and traders raised bets on a December Fed rate hike.
Gold falls to its lowest in over a year
Gold fell nearly 3% on Thursday to its lowest in more than a year, retreating well below the $4,000 level as Treasury yields, the dollar and oil prices all rose. Front-month gold for November delivery fell 2.8% to $3,878.40 an ounce in New York, its lowest settlement since October 2, 2025, according to Dow Jones Market Data. It was the third straight session of declines.
Spot gold dipped 2.7% to $3,880.93 an ounce by the afternoon in New York, having touched its lowest since October 2025 earlier in the session, Reuters reported. U.S. gold futures for December delivery settled 2.9% lower at $3,885.30 an ounce. Silver fell harder: front-month silver dropped 3.7% to $49.972 an ounce. Gold is now 27.08% below its record high of $5,318.40 reached on January 29, 2026, and down 10.3% so far this year.
Oil, inflation and a hawkish Fed
President Donald Trump said on social media that the United States did not need a deal with Iran, quashing hopes for an agreement to end the conflict. Oil rose on the comment, fanning inflation fears and expectations that the Federal Reserve could keep interest rates higher for longer. David Meger, director of metals trading at High Ridge Futures, said higher energy prices keep the Fed hawkish, and 'a hawkish Fed is an environment of higher interest rates and hence a headwind for the yellow metal.'
A hotter-than-expected U.S. inflation reading on Tuesday, hawkish remarks from Fed officials this week and a rally in the dollar to a near 19-month high 'are working to press the gold market lower,' said Jim Wyckoff, a market analyst at American Gold Exchange. The dollar index rose to 103.18, its highest since April 2025, while the 10-year Treasury yield closed at 5.10%. Fed Governor Christopher Waller has said a half-point rate hike in December should be on the table if core inflation stays elevated.
- Front-month gold$3,878.40, down 2.8%
- Front-month silver$49.972, down 3.7%
- Gold vs January record27.08% below $5,318.40
- December hike odds89% chance of a 25-basis-point hike
What traders watch next
Markets see an 89% chance of a 25-basis-point U.S. rate hike in December, while the probability of a larger 50-basis-point move is priced at 11%, according to CME's FedWatch tool. Federal Reserve Bank of New York President John Williams said on Thursday that more rate hikes are likely as the central bank seeks to lower high levels of inflation. Traders will look to the U.S. producer price index due on Friday for the next read on inflation.
In early Asian trading on Friday, spot gold rose 1% to $3,915.31 an ounce, though it remained down 3.5% for the week, Reuters reported. U.S. gold futures for December delivery gained 0.9% to $3,919.60.
