Gold prices slipped below the $4,000-per-ounce threshold during Friday’s Asian trading session, heading toward their second monthly decline as surging U.S. inflation data and a broad technology stock sell-off weighed heavily on the market. Spot gold traded at approximately $3,983 per ounce, down roughly 0.97% by late Friday afternoon in Taipei.
The precious metal faced mounting pressure as rising international crude oil prices fueled inflation concerns and the Federal Reserve maintained an open stance on potential interest rate hikes. As a non-yielding asset, gold’s appeal diminished while investors simultaneously liquidated holdings to cover losses in the plunging equity markets.
Inflation Data and Federal Reserve Policy Pressure
The U.S. personal consumption expenditures (PCE) price index rose 0.5% in September, marking its largest monthly increase since March of that year and signaling persistent inflationary pressures. Although the Federal Reserve opted to keep interest rates steady during its meeting, central bank officials kept the door open for additional rate increases before the end of the year.
Geopolitical tensions in the Middle East, alongside the possibility of renewed U.S. military action against Iran following the midterm elections, further stimulated oil prices and exacerbated energy inflation fears. Consequently, gold’s cumulative losses for October exceeded 4%.
Technology Stock Losses Trigger Liquidity Selling
Beyond inflation and rate expectations, equity market sell-offs served as a primary driver behind gold’s downward trajectory. Disappointing earnings reports from tech giants like Alphabet sparked skepticism regarding the return on massive artificial intelligence investments, triggering a wave of declines across global technology shares.
ANZ analysts noted that the sharp pullback in technology stocks triggered broader risk aversion across commodity markets, prompting investors facing equity losses to sell highly liquid assets such as gold to shore up their portfolios.
Saxo Bank commodity strategy head Ole Sloth Hansen observed that gold prices have maintained considerable resilience, though traders closely monitor whether the equity sell-off will widen into cross-market deleveraging and liquidity liquidation.
Silver Plunges Into Oversold Territory
In contrast to gold, Hansen highlighted that silver’s vulnerability proved significantly more pronounced. Silver dropped 15% to 16% in October alone, nearly erasing the gains that drove prices above $120 per ounce last year.
Hansen noted that despite entering oversold territory, technical fund liquidation and momentum-driven selling pressures persist, leaving open the possibility of further declines toward the mid-$45 range.
Market Outlook and Liquidity Risks
Market participants continue to monitor how broadening equity market volatility and shifting monetary policy expectations will influence precious metals. With upcoming economic indicators and ongoing corporate earnings reports driving investor sentiment, traders remain focused on potential liquidity-driven liquidations across major asset classes.
