International gold prices fell sharply on Friday, dropping to their lowest level in more than a year, while silver plunged more than 5% in tandem as precious metals came under broad pressure. Rising oil prices reinforced inflation concerns, major central banks maintained hawkish stances, and a chain reaction of forced liquidations triggered by the technology stock selloff all combined to drive this latest decline in precious metals.
On Friday, spot gold broke below $3,900 per ounce, falling more than 3% intraday to hit a one-year low. Spot silver dropped below $50 per ounce, declining more than 5% intraday, marking the first time it has fallen below the $50 threshold since November 2025. Platinum fell 4% to a low not seen since September 2025, while palladium declined 3.1% to its weakest level since June 2025.
Gold has now fallen nearly 6% cumulatively this month, while silver has lost more than 17% during the same period, with both metals facing the prospect of a second consecutive monthly decline. In major precious metals consumer markets, physical demand also failed to provide support. According to Reuters, gold buyers in India widely postponed purchases this week, waiting for prices to fall further.
Hawkish Signals From Major Central Banks Reinforce Higher-for-Longer Rate Expectations
The Federal Reserve and the European Central Bank both held rates steady this week, but both explicitly stated that the monetary tightening cycle has not yet ended, and both highlighted inflation risks stemming from surging energy prices. U.S. data released on Thursday showed that inflation accelerated again in September, driven primarily by higher gasoline and other commodity prices, further cementing market expectations for a December rate hike, with traders currently pricing in roughly a 70% probability of such a move.
"Persistent concerns about inflation have prompted several central banks to maintain a hawkish bias," said Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals. "Although major central banks all chose to pause this week, the signal is that the 'higher for longer' theme still dominates the market, and that is weighing on precious metals."
On the oil front, Brent crude rose to its highest level since April, with international oil prices on track for a fourth consecutive monthly gain. Elevated energy prices further reinforced the market's judgment that interest rates will remain high for an extended period, continuously eroding the appeal of non-yielding assets.
Technology Stock Selloff Triggers Chain Liquidations
Another transmission channel behind the precious metals decline came from global equity markets. Technology stocks led losses for a second consecutive day amid doubts over the outlook for AI-related spending, with the Nasdaq opening sharply lower, forcing some investors to sell gold to cover losses in other positions. Analysts at Commerzbank noted in a research report that the sharp drop in technology stock prices may have triggered forced liquidations and margin calls, which was one of the important drivers behind this round of precious metals price declines. The bank also maintained that "the decline in precious metals prices has been overamplified, and we still expect a recovery."
Last week, a wave of stock market declines triggered by a pullback in AI-themed shares had already dragged gold prices to their lowest since July, and this latest slump in technology stocks has further deepened the selloff in precious metals.
Silver's Decline Particularly Severe as Gold-Silver Ratio Climbs
Silver has fallen far more than gold in this round of adjustment. Spot silver has declined more than 17% cumulatively this month, erasing an entire powerful rally that began last December, when silver surged from its starting point to above $120 per ounce within roughly two months. Compared with gold, silver possesses not only precious metal attributes but also strong industrial metal characteristics. Its price is influenced not only by real interest rates, the dollar, and investment demand, but also by global manufacturing, industrial production, and economic growth expectations.
When the market simultaneously worries about the Federal Reserve maintaining high interest rates, the outlook for global economic growth, and returns on AI infrastructure investment, silver can come under pressure from both weakening investment demand and declining industrial demand expectations. Ole Hansen of Saxo Bank said that although silver's technical indicators already suggest oversold conditions, "the risk of further long liquidation and momentum-driven selling from technical funds remains," which could open the door for silver prices to probe into the mid-$40 range.
The gold-silver ratio has risen to its highest level since December. Hansen noted that "this divergence underscores silver's persistent vulnerability relative to gold, which continues to attract demand from investors less sensitive to interest rate movements."
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