(Kitco News) – The gold market took a big hit heading into the weekend, with prices falling convincingly below $4,000 an ounce and falling to their lowest levels in over a year.
Gold’s sharp decline on Friday pushed prices to their lowest level since October 6, 2025, when the precious metal touched an intraday low of $3,884.61 per ounce. The latest decline comes as investors prepare for another potentially volatile week, with U.S. jobs data and the midterm elections expected to bring fresh uncertainty to financial markets.
According to analysts and traders, there is significant frustration in the market as gold faces significant selling pressure even as the US dollar and bond yields weaken. (The Kitco Global Index shows how much of gold’s current move is driven by the dollar versus the gold market itself.) Traditionally, both of these factors should be bullish for the precious metal because they lower its opportunity costs.
Spot gold last traded at $3,880 an ounce, down 3.5% on the day; prices are down almost 3% over the week. Silver is seeing an even bigger decline, with prices falling below $50 an ounce. Spot silver last traded at $48.95 an ounce, down nearly 6% on the day. Silver prices are down nearly 9% since last Friday, marking their worst weekly decline since early June.
Analysts said gold failed to find upside traction, even with lower bond yields, due to broader concerns in the market.
Even though the Federal Reserve left interest rates unchanged after its monetary policy meeting on Wednesday, the central bank remains committed to reducing inflation. Beyond this week’s pause, markets still expect the Fed to raise interest rates in December and through the first quarter of 2027.
Philip Streible, chief market strategist at Blue Line Futures, said gold will continue to struggle as the ongoing war with Iran keeps oil prices high.
“The rule in the markets is you’re supposed to buy inflation and oil, right now it’s inflation,” he said.
Streible added that gold performs well when the central bank is forced to cut interest rates to support the economy. However, with economic growth of 3.4% in the third quarter, he said the US central bank had plenty of room to raise rates.
“If the economy remains strong, the Fed can continue to raise interest rates, which means gold will continue to have a target on its back,” he said.
Simon-Peter Massabni, head of business development at XS.com, said that despite the weak US dollar and falling bond yields, gold is reacting to inflation expectations and future interest rate developments.
“The deciding factor will be whether new economic data prompts markets to reassess the interest rate outlook, shifting expectations toward a pause in tightening or a resumption of rate cuts. Until then, gold will likely remain under selling pressure, despite the tailwinds that continue to support its medium-to-long-term outlook,” he said.
“I see three developments that could change the outlook. First, a gradual but clear cooling of the U.S. labor market, reflected in weaker job growth, higher unemployment, and slower wage growth. Second, a sustained decline in inflation, particularly core inflation and price components that capture the pass-through of rising energy costs to goods and services generally. Third, a downward reassessment of interest rate expectations future and real returns.”
Looking at the technical movement of gold prices, Waleed Said, technical analyst at GivTrade, said that the path of least resistance remains lower. He added that he expects gold prices to eventually test support at $3,800 an ounce.
The latest selloff also pushed gold significantly below its 200-day moving average, which sits near $4,490 an ounce. With prices trading approximately 13.5% below this long-term trend indicator, the technical picture continues to reflect significant bearish momentum.
“The mechanism is important here. It’s not about people trading their gold for oil,” Said said. “Higher oil means higher inflation, and higher inflation keeps central banks in a hawkish stance. On top of that, when the tech sell-off hit, people sold gold to cover margin calls elsewhere. Gold is liquid, so it’s the first thing sold when people need cash. So in this war, gold is not acting as the safe haven that people expect. Oil and the dollar play that role.”
With all the focus on inflation and oil prices, Naeem Aslam, CIO of Zaye Capital Markets, said next week’s midterm elections could impact the outlook.
Some political analysts believe that if Democrats regain control of Congress and gain majorities in the House and Senate, it could become more difficult for the Trump administration to continue its war against Iran.
Analysts said anything that eases tensions in the Middle East and ends the global energy supply crisis could be positive for gold.
Aslam said he still expects any significant decline in gold prices to represent a long-term buying opportunity.
Jeff Sarti, CEO of Morton Wealth, said he also sees a buying opportunity in gold as the latest selloff appears to be a technical move.
“DSI sentiment is very bearish, which from a contrarian perspective indicates that this could be a strong entry point,” he said.
Sarti added that he was also not concerned about the breakdown in the correlation between gold and bond yields over the past week.
“A big part of the reason yields are moderating is that there has been a shift in sentiment from large-cap tech stocks toward the safety net of bonds. But the opposite is that the latest GDP data was strong, implying that bond yields should be higher rather than lower. So I think there is some short-term noise, tied to stock market sentiment, that is pushing bond yields lower, as opposed to the assumption that the odds of interest rate increases are moderating,” he said.
Going forward, investors will have many potential catalysts to leverage as financial markets remain volatile. Tuesday’s US midterm elections could have significant implications for the ongoing conflict with Iran and the outlook for energy prices, while Friday’s nonfarm payrolls report will provide an important update on the health of the US labor market.
As gold struggles to attract safe-haven demand and inflation concerns keep the Federal Reserve on a tightening path, analysts expect the precious metal to remain sensitive to changing interest rate expectations and overall market sentiment.
Economic data to watch next week:
Monday: ISM Manufacturing Index
Tuesday: US JOLTS job openings and midterm elections
Wednesday: Non-agricultural payroll ADP, ISM Services PMI
THURSDAY: Bank of England monetary policy meeting and weekly jobless claims in the United States
Friday: U.S. Nonfarm Jobs, University of Michigan Preliminary Consumer Sentiment Survey
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Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to trade any commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for loss and/or damage arising from the use of this publication.
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