Gold prices tumbled 3% on Thursday, marking their third consecutive session of losses and hitting the lowest level in over a year. The decline was driven by rising oil prices, which stoked inflation fears and expectations of prolonged high interest rates. Spot gold fell 2.7% to $3,880.93 per ounce, while US gold futures for December delivery settled 2.9% lower at $3,885.30 per ounce.
US President Donald Trump's statement that the US does not need a deal with Iran dampened hopes for a resolution to the Middle East conflict, further fueling inflation concerns. Analysts noted that higher energy prices support a hawkish stance from the Federal Reserve, which would keep interest rates elevated and weigh on gold's appeal. David Meger, director of metals trading at High Ridge Futures, highlighted that higher interest rates are a headwind for the non-yielding metal.
The decline in gold prices triggered stop-loss orders on long positions established over the past two weeks, as investors reacted to the recent slump in tech shares and worries over AI spending. Independent metals trader Tai Wong noted that the exit of Nvidia CEO Jensen Huang added to concerns about the future of the AI sector and potential impacts on US chip export policy.
Other precious metals also saw declines, with spot silver falling 3% to $50.12 per ounce, spot platinum losing 1.2% to $1,518.49, and spot palladium dropping 3.1% to $995.91. Investors are now awaiting the US producer price index data due on Friday for further insights into inflation trends.