Gold slides below $3,900 as tech sell-off and Fed stance pressure markets
Spot gold fell to its weakest level in over a year, breaking $4,000 amid a tech-driven equity rout and expectations of further monetary tightening, while analysts remain divided on the metal’s short-term outlook.
Gold prices fell sharply this week, slipping below $3,900 per ounce and reaching a one-year low of $3,870.25 on Friday. The decline followed an early-week rally that saw gold rise above $4,050 ahead of the Federal Reserve’s decision to keep rates steady at 3.75%-4.00%, with two policymakers voting for an additional 25-basis-point hike. Strong third-quarter GDP growth and elevated core PCE inflation revived expectations of further tightening, while a steep drop in technology stocks triggered broader market liquidations.
"Gold’s shine has dulled," said Marc Chandler, managing director at Bannockburn Global Forex. "The metal could fall into the $3,750-$3,850 range."
"I am bearish on gold for the coming week," said Colin Cieszynski, chief market strategist at SIA Wealth Management, noting the technical significance of the break below $4,000.
"Unchanged," said Rich Checkan, president and COO of Asset Strategies International, adding that geopolitical risks and U.S. mid-term elections could push oil higher and weigh on gold, though a Democratic gain might boost safe-haven demand.
Analysts surveyed by Kitco News indicated a sharp shift in sentiment: only one of 16 Wall Street participants expected gold to rise, while ten forecast further declines. In contrast, a retail poll showed a slight bullish majority, with 53% of respondents anticipating higher prices.
Jesse Colombo, independent precious-metals analyst, warned that gold is testing a key support zone around $3,900-$4,000 and that a break could lead to a broader capitulation. He also noted potential risk-off trading ahead of the U.S. mid-term elections and possible escalation of the Iran conflict.
Alex Kuptsikevich of FxPro projected continued downside, citing a 61.8% correction from the recent uptrend and the likelihood of further sell-offs in equities. He highlighted that the Fed, ECB and Bank of Japan have signaled possible December rate hikes, while rising oil prices add inflationary pressure.
Neil Welsh of Britannia Global Markets emphasized that overlapping factors—technology losses, higher energy prices and shifting rate expectations—are driving the sell-off, and that a material slowdown in U.S. labor market activity would be needed to revive gold’s safe-haven appeal.
The market will watch upcoming U.S. economic data, including the ISM Manufacturing PMI, JOLTS job openings, ADP payrolls, and the October non-farm payroll report, as well as the Bank of England’s policy decision, for clues on future direction. At the time of writing, spot gold was trading at $3,875.05 per ounce, down 3.74% for the week.