The key facts
- Gold traded at $4,088.95 per ounce (−1.26%), silver at $55.89 (−3.57%)
- A drone attack on Saudi Aramco's Shaybah oil field pushed oil prices up; two people were killed
- Over the month, gold fell 4.62%, silver 13.11%
Precious Metals Under Pressure
On Thursday, according to Anadolu data as of 08:00 GMT, gold traded at $4,088.95 per ounce, losing $52.15, or 1.26%, falling below the $4,100 mark. Silver dropped $2.07, or 3.57%, to $55.89 per ounce. Both metals pulled back after rising in the previous session amid escalating Middle East tensions, which pushed oil prices higher.
Oil and Geopolitics
Oil prices rose after a drone attack on Saudi Aramco's Shaybah oil field, which killed two people. The US also ordered some employees and family members to leave American diplomatic missions in Saudi Arabia.
Inflation and Rates
Rising energy prices heightened concerns about persistent inflation and lowered expectations for monetary policy easing. According to market commentary, the Fed is widely expected to keep rates unchanged next week: remarks by Fed Chair Kevin Warsh last Friday did little to change expectations of a pause. Markets continue to allow for a possible rate hike in December amid energy-driven inflationary pressure. The ECB and the Bank of Japan are also expected to keep current rates next week.
Monthly Dynamics
Although gold is traditionally seen as a hedge against inflation, higher rates reduce its appeal by increasing the opportunity cost of holding assets without interest income. The latest decline left gold 4.62% below its level of a month ago, while silver lost 13.11% over the same period.
