WASHINGTON (dpa-AFX) - Extending the downward move seen over the two previous sessions, gold prices went into freefall on Friday as rising crude oil prices due to the stalemate in the U.S.-Iran peace process increased inflation worries and reinforced concerns of rate hikes in the U.S. as well as other countries.
Front Month Comex Gold for December delivery has experienced a tailspin by $131.30 (or 3.26%) to $3,900.10 per troy ounce.
Front Month Comex Silver for December delivery has also nosedived by $3.170 (or 6.05%) to $49.210 per troy ounce.
The ongoing gulf crisis and supply shortage for oil and energy is driving crude oil up and pushing inflation concerns further. WTI crude oil for December delivery was last seen trading at $104.85, up by $2.85 (or 2.79%).
Iran's Islamic Revolutionary Guards Corps announced that four tankers struck sea mines planted by Iran while attempting to transit the Strait of Hormuz and violating Iran-stipulated navigation protocol that Iran's military termed as 'illegal shipping lanes.'
In addition, days after senior officials from Saudi Arabia and Iran held talks in Tehran to address regional security and peace through dialogue, the Iran-backed Houthi militant group claimed nearly six attacks on airports and oil facilities across Saudi Arabia.
The threat of an increase in oil prices reinforced expectations of elevated interest rates globally for a prolonged period of time which will eventually make non-yielding assets like gold unattractive.
Reports since last week have indicated that the U.S. is planning to conduct strikes against Iran jointly with Israel after the midterm elections in the U.S. on November 3.
The attacks could be on a bigger scale than before with an aim to cripple Iran's capability to reconstitute and strike back.
The Wall Street Journal reported that U.S. Vice President JD Vance wrote to Iran's Secretary of the Supreme National Security Council Mohsen Rezaei, asking Iran to quickly return to peace talks.
Reportedly, Vance's efforts are aimed to persuade Trump to pause his planned attacks on Iran, showing that the peace process is moving on. The letter has been well-received by Iran.
Mediators from Qatar are headed to Iran again to push for a nuclear framework between the U.S. and Iran.
On Sunday, Qatar presented a draft proposal that reportedly Iran rejected as it stated that it fell short of Iran's expectations.
Without offering a response, Iran is maintaining silence, adding to tensions.
Yesterday, data from the U.S. Bureau of Economic Analysis showed that the U.S. Gross Domestic Product increased 3.40% in Q3 2026. This is a sharp jump from the 2.20% growth in Q2 2026.
Consumer spending grew 3.80%, matching Q2 rate.
The U.S. Personal Consumption Expenditures price index increased 0.50% on a month-on-month basis for September. The annual inflation accelerated to 3.60%.
The Conference Board showed that consumer confidence is improving, despite inflation and increasing gas prices.
Through Truth Social U.S. President Donald Trump announced that the data was a major boost for the U.S. economy.
On Wednesday, the U.S. Federal Reserve decided to keep the interest rates steady at the prevailing 3.75% to 4.00%.
According to the CME Group's FedWatch Tool, traders are betting on a 74.40% chance for a rate hike at the December meeting of the Fed.
Following the Fed, the European Central Bank also held the rates steady.
The ECB hinted that tightening process is not yet over and could continue if energy costs push inflation higher.
Data from the Institute for Supply Management today revealed that Chicago Purchasing Managers' Index decreased to 55.30 in October from 58.80 in September.
Weakness in gold, according to analysts, is also due to forced liquidations linked to the equity selloff as investors tend to cover losses in equity markets by selling liquid assets.
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