Gold Falls 6.49% in October as Silver Drops Below $50 on Fed Hike Bets
Gold and silver sank Friday as strong US data, rising oil and bets on a December Fed rate hike capped a second straight monthly decline for gold.
Gold and silver closed out a bruising October on Friday, as strong US economic data, rising oil prices and growing bets on a Federal Reserve rate increase in December pushed investors away from metals that pay no interest. The Wall Street Journal reported that gold settled down 3.3% on Friday, Oct. 30, and silver fell 5.9%, with Comex gold, the main US futures market for the metal, ending the month 6.49% lower at $3,885.70 an ounce. Both metals also lost ground for the week.
What happened
The selling built through the day. Reuters reported that spot gold was down 1% at $3,980.40 an ounce by 11:07 GMT after touching its lowest level since July 17, while spot silver had dropped 3.6% to $50.50. Platinum slid 3% to $1,443.69 and palladium lost 2.5% to $981.31, and Reuters said all three were on course for weekly and monthly declines. It described gold as headed for a second straight monthly loss.
By 10 a.m. ET, GoldSilver.com, a precious metals retailer that publishes market news, had spot gold at $3,920.37 and spot silver at $49.37, which it said was silver’s first break below $50 since November 2025. TradingKey, a financial markets site, reported that spot gold briefly touched $3,891 later in the session.
Tallies of the monthly damage differ because they were taken at different times and on different benchmarks. Reuters put bullion’s October loss at 4.3% in its midday report, GoldSilver.com at about 4.7% and TradingKey at more than 6%, while the Journal’s 6.49% figure reflects the Comex end-of-month level.
Why metals fell
Reports converged on interest rates as the main driver. Higher rates raise the opportunity cost of holding gold and silver, since neither generates income, and the week delivered several reasons for traders to expect them.
- The Fed: The central bank held its benchmark rate at 3.75% to 4% on Wednesday in a 10-2 vote, according to GSI Exchange, a precious metals market site. Lisa Cook, a Fed governor, and Beth Hammack, president of the Cleveland Fed, wanted a quarter-point increase. GoldSilver.com said Kevin Warsh, the Fed chair, signaled that inflation remains stubbornly high.
- Growth: The US economy expanded at a 3.4% annualized pace in the third quarter, above the roughly 3.2% that GSI Exchange said had been expected.
- Inflation: The personal consumption expenditures price index, the Fed’s preferred inflation gauge, rose 0.5% in September, the largest monthly increase since March, TradingKey reported. GSI Exchange put the annual rate at 3.6%, up from 3.4%.
- Yields: GSI Exchange said the 10-year Treasury yield was trading around 5%. GoldSilver.com said the 10-year inflation-protected Treasury yield had reached 2.67% by Wednesday, its highest in weeks.
Estimates of the odds of a December hike vary. TradingKey cited about 75% from CME FedWatch, a tool that derives probabilities from futures prices, while GSI Exchange cited about 83% in futures markets.
Oil added to the pressure by stoking inflation concerns. Reuters said crude was set for a fourth straight monthly gain after an attack on a tanker in the Strait of Hormuz highlighted supply risks from the US-Israeli war on Iran. TradingKey, citing Reuters and maritime security sources, said the vessel was hit by a limpet mine on Thursday, and that United Kingdom Maritime Trade Operations, a British agency that tracks shipping incidents, reported the crew safe, the fire out and the ship continuing to its next port. GSI Exchange said no one had claimed responsibility. Price reports varied by time of day: TradingKey had Brent crude above $110 a barrel, while GSI Exchange had it near $117 on Friday morning.
Gold’s traditional role as a haven in times of conflict offered little cushion. Tim Waterer, chief market analyst at KCM Trade, a brokerage, said in remarks carried by TradingKey that gold faces pressure from both inflation and rate expectations at current oil prices.
Why silver took the bigger hit
Silver has fallen much faster than gold. GoldSilver.com noted that the metal traded above $57 earlier in October. GSI Exchange calculated that it was down about 6.9% for the week as of Friday’s open, compared with about 1.7% for gold, and called Friday’s level silver’s lowest of 2026.
GoldSilver.com attributed the gap partly to silver’s dual identity as a precious metal and an industrial input. Industrial uses made up 657.4 million ounces, or 58% of total demand, last year, according to figures from the Silver Institute, an industry group, cited by the site. It also said analysts at Metals Focus, a precious metals consultancy, had flagged further relative weakness in the physical silver market. The ratio of the gold price to the silver price, a common gauge of the two metals’ relative value, climbed from about 72.5 on Oct. 19 to above 79 by Friday, GoldSilver.com reported.
What comes next
The Fed’s next meeting, on Dec. 8-9, is the immediate focus, with oil prices and any progress in efforts to restart US-Iran talks also in view. GSI Exchange reported that those hopes rose and fell during the week, and that an unnamed senior Iranian official dismissed a draft proposal circulated by Qatari mediators.
Forecasters remain divided on how long the slump could last. GSI Exchange said a Reuters survey showed analysts cutting their 2026 gold forecasts for a second straight quarter, citing high Treasury yields and a strong dollar, though they still expect a recovery in 2027. Giovanni Staunovo, an analyst at UBS, told Reuters that gold could climb to $5,000 or higher next year because the Fed will eventually have to cut rates again. Waterer noted that buyers stepping in on dips had previously limited losses, but TradingKey reported he was unsure whether they would return this time.
