Gold sinks to one-year low, silver slips below $50 on inflation concerns, tech selloff

Gold prices plummeted below $3,900 on Friday, hitting a one-year low, despite expectations of a less aggressive Federal Reserve (Fed) tightening policy. At the moment of reporting, XAU/USD is down more than 3% and reached a daily low of $3,891, the lowest since October 28, 2025. US economic data has been robust this week, positively impacting the US dollar.

Strong economic growth and solid job market data have contributed to this trend. Additionally, the Core PCE print showed a significant increase, further hindering gold's bullish trend. However, the rise of the US dollar against other currencies, including the precious metal, which is priced in dollars (XAU/USD), has negatively impacted gold prices.

Furthermore, higher oil prices due to the escalation of the Middle East conflict have increased the appeal of the US dollar. The Federal Reserve's decision on Wednesday, coupled with lack of clarity from Chair Kevin Warsh about potential interest rate hikes in December, has made investors doubtful about a rate increase. Currently, the market anticipates a 70% chance of a December rate hike, down from 84% following the Fed's meeting on Wednesday.

Gold has played a crucial role in human history, serving as a store of value and medium of exchange. Apart from its aesthetic appeal and usage in jewelry, gold is widely regarded as a safe-haven asset during turbulent times, acting as a hedge against inflation and depreciating currencies. Central banks are the largest holders of gold, diversifying their reserves to bolster their currencies in uncertain times.

In 2022, central banks added 1,136 tonnes of gold, worth approximately $70 billion, to their reserves, marking the highest yearly purchase since records began.