Spot Gold Plunges 3% to Breach $3,900: What Caused the Drop in Gold Prices? - TradingKey

AI desk brief

Spot gold fell over 3% to briefly touch $3,891, breaking the $3,900 level, while silver dropped more than 5% and slipped below $50. The move was driven by higher crude oil prices, a stronger-than-expected September PCE print (+0.5% m/m), and a jump in December Fed hike odds to about 75% on CME FedWatch, all of which lifted opportunity costs for non-yielding metals.

The article says Brent remains above $110 and WTI above $100 after Middle East shipping disruptions, but the market is treating the inflation impulse as more important than safe-haven bid for now. Gold is down more than 6% this month and headed for a second straight monthly loss, while silver is off about 18% since October; KCM Trade's Tim Waterer said the data keep a December hike on the table and leave bullion vulnerable unless dip-buyers reappear.