Wall Street abandons ship as gold falls below $3,900
Gold ended the week at $3,870.25 per ounce, its weakest level in more than a year, after a technology-led equity selloff accelerated liquidation across…
Wall Street abandons ship on gold after the metal fell below $3,900 per ounce on Friday, October 30, while Main Street investors kept a narrow bullish majority, according to the latest Kitco News Weekly Gold Survey. Spot gold reached a weekly low of $3,870.25 per ounce, its weakest level in more than a year.
The selloff came as a sharp decline in technology stocks drove broader liquidation across precious metals. Gold, silver and other metals fell as forced selling and expectations of another Federal Reserve rate increase outweighed demand for safe-haven assets.
The week began with spot gold at $3,994.95 per ounce on Sunday evening. Prices recovered above $4,050 on Tuesday as Treasury yields eased and the U.S. dollar softened, then peaked at $4,082.50 per ounce shortly before Wednesday’s equity-market close.
Why did gold prices fall below $3,900?
Gold came under pressure after the Federal Reserve held interest rates steady at 3.75% to 4.00%, while stronger economic data strengthened expectations of further tightening. The technology-stock rout on Friday then accelerated selling across the metals market.
The Fed voted 10-2 to hold rates, with two policymakers favoring another 25-basis-point increase. On Thursday, stronger-than-expected third-quarter GDP growth and elevated core PCE inflation added to expectations that further monetary tightening could be needed.
The price reversal was steep. After pushing above $4,050 early in the week and reaching its high of $4,082.50, spot gold fell below $4,000 on Friday before touching $3,870.25 per ounce late in the afternoon.
Wall Street turns bearish while Main Street holds on
The weekly survey found Wall Street bulls had abandoned their positive stance after gold dropped below $3,900. Main Street respondents, by contrast, continued to show a narrow bullish majority despite the decline.
“Gold’s shine has dulled,” said Marc Chandler, managing director at Bannockburn Global Forex. Chandler noted that the price had been near $4700 in late August and said there had not appeared to be a capitulation trade. He added that, if gold reached new lows for the year, he suspected it could fall into the $3750-$3850 range.
Other market participants also pointed to the break below $4,000. “I am bearish on Gold for the coming week,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “Technically, the breakdown below $4,000 is significant.”
Adam Button, head of currency strategy at investingLive, also forecast lower prices. He cited the coming week’s midterms and the potential resumption of the Iran war, warning that an escalation could lead to a severe risk-off trade.
Rich Checkan, president and COO of Asset Strategies International, held an unchanged view, citing competing influences. He said renewed strikes on oil tankers in the Strait of Hormuz could prompt retaliation after the U.S. mid-term elections, lifting oil prices and inflation concerns. Possible Democratic gains, he added, could also lead uneasy Republicans to seek safety in gold.
For investors tracking the metals market, the immediate shift is clear: gold’s weekly low stood at $3,870.25 per ounce, while Wall Street’s bullish majority gave way after the price broke below $3,900.
