Gold prices remained near the $4,000 mark on Thursday, as rising U.S. inflation and escalating Middle East tensions reignited fears of further Federal Reserve interest rate hikes. At 21:07 ET, spot gold dipped 0.5% to $4,001.56 an ounce, while U.S. gold futures fell 0.4% to $4,012.52. Silver dropped 1.5% to $51.3755, platinum lost 1% to $1,473.81, and palladium futures declined 1.1% to $994.00.
The precious metal saw a 3% decline in October, driven by persistent Middle East conflicts that kept energy prices elevated and stoked inflation worries. Oil prices surged on reports that the U.S. might resume military strikes against Iran following next week's midterm elections. The Federal Reserve held interest rates steady this week, but Chair Kevin Warsh hinted at potential further tightening to combat stubborn inflation.
Fresh U.S. data showed the Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation gauge, rising 0.5% in September, the largest monthly increase since March. This reinforced expectations of a possible rate hike before year-end, which typically weighs on gold due to its non-yielding nature. Additionally, gold faced pressure from broader equity-market selloffs as investors reassessed returns from artificial intelligence spending.
Technology stocks fell for a second straight session, led by a selloff in NVIDIA, as doubts grew over whether AI investments would deliver sufficient returns. Last week's tech rout had previously dragged gold to its lowest level since July. However, Chinese demand provided some support, with buyers snapping up supplies amid a tightening market. The Yangshan copper premium hit a record $200 a tonne, reflecting robust Chinese demand.