Gold Falls 2.7% to Lowest Since October 2025 as Rate Bets Rise
Key Facts
Spot gold fell 2.7% to $3,910.53 an ounce by 10:05 a.m. New York time on October 30, its lowest since October 2025, according to a Reuters report. The decline came as higher energy prices heightened concerns that U.S. interest rates would stay elevated for longer, reducing the appeal of non-yielding gold. EL7 data showed XAUUSD closing at $3,896.675 an ounce that day, after $4,020.565 on October 29 and $4,067.29 on October 28. The Reuters price was an intraday reading, while EL7 data record the daily close. Oil prices were on track for a fourth consecutive monthly gain, according to Reuters.
In early Asian trading, Brent crude rose 0.75% to $115.74 a barrel and was heading for a monthly gain of about 14%, according to the Qatar News Agency. Higher energy prices make inflation harder to contain and bolster bets on persistently high interest rates, raising the opportunity cost of holding gold. In the United States, September price data showed the gasoline index rising 9.1%, accounting for more than half of the monthly increase in the overall consumer price index, while the energy index rose 5.2%. These increases put fuel and energy prices at the center of the debate over inflationary pressures. Commerzbank analysts said the decline in technology stocks may have triggered forced selling and margin calls, adding that the drop in precious metals appeared excessive.
Gold's decline coincided with a broad retreat in U.S. stocks around midday on October 30, with the S&P 500 down about 1.6% and the Nasdaq 2.6% as technology shares deepened their losses, according to the Associated Press. The yield on 10-year U.S. Treasury notes fell to 4.95% from 4.98% in the previous session. Commerzbank analysts linked the drop in technology shares to the possibility of forced selling and margin calls, a mechanism that can pressure multiple assets at once. They said, "Another factor behind the price decline is the sharp fall in technology stocks, which may have triggered forced selling and margin calls." They viewed the decline in precious metals as excessive and expected a recovery.
U.S. gross domestic product data showed real growth at an annual rate of 3.4% in the third quarter, up from 2.2% in the second quarter, according to the Bureau of Economic Analysis' advance estimate. The bureau attributed the increase to higher investment, consumer spending and government spending, partly offset by lower exports, while imports rose. Real final sales to private domestic purchasers, which include consumer spending and private fixed investment, increased at an annual rate of 4.9%, compared with 4.6% in the previous quarter. The reading reflects continued resilience in domestic demand during the quarter. By contrast, growth in the personal consumption expenditures price index slowed to an annual rate of 2.1% from 5.0% in the second quarter, while growth in the core index, excluding food and energy, eased to 2.5% from 3.3%.
The Federal Reserve kept its target interest rate range at 3.75% to 4% on October 28, with the decision approved by a vote of 10 to 2. Lisa Cook and Beth Hammack voted to raise rates by a quarter percentage point at that meeting. The central bank described economic activity as expanding "at a solid pace," said domestic spending had remained "resilient" and said inflation "remains elevated." It added in its statement that more information would help the committee determine the appropriate stance to return inflation to its 2% target. The committee's assessment thus combines strong economic growth with inflation that remains elevated, as markets monitor the effect of higher energy prices on the path of prices and interest rates.
September data showed current personal income rose 0.2% month over month and current personal consumption expenditures increased 0.5%, while the personal saving rate was 3.8%, according to the Bureau of Economic Analysis. These figures provide an additional reading on household spending and financial capacity alongside third-quarter GDP and private demand growth. The U.S. October jobs report is due on November 6 at 08:30 a.m. Eastern Time, followed by the October consumer price index on November 10 at the same time. The second estimate of third-quarter GDP and corporate profits is also due on November 25 at 08:30 a.m. Eastern Time. The next Federal Open Market Committee meeting is scheduled for December 8 and 9.