Gold fell to its lowest settlement in a year on Friday as a selloff in U.S. stocks pulled the metal down with it. Analysts also point to Federal Reserve rate expectations and a broken technical support level.
Gold settled at $3,898.90 an ounce on Comex on Friday, the lowest settlement since Oct. 2, 2025. The most-active December contract lost 3.3% for the session and 10% for October, according to Dow Jones Market Data.
The drop came even as jitters grew over possible new turmoil in the Middle East, a setup in which investors once turned to a safe-haven asset like gold.
Stock selloff drags gold lower
Equities fell broadly on Friday. The Dow lost 1.1%, the S&P 500 fell 1.8% and the Nasdaq Composite dropped 2.9%.
Dana Samuelson, president of American Gold Exchange, said the equity selloff created collateral damage in precious metals through a liquidity-driven flight to safety. Investors hit by stock losses sold gold to raise cash. He also said gold was hovering just above its July support level of $3,975 before it broke that mark, which worsened the decline.
Investing.com reported that spot gold fell 3.6% to settle at $3,875.55, and slumped 6.8% for October.
Fed rate path keeps pressure on bullion
Rate expectations also weighed on the metal. Investing.com said the FOMC kept rates steady this week after a September hike, its first in over three years, and markets now expect another rate hike in December. Higher rates tend to weigh on non-yielding assets such as gold.
Samer Hasn, senior market analyst at XS.com, said a worsening regional situation and a resilient U.S. economy may lead the Fed to hold a higher-for-longer rate policy. That could keep Treasury yields elevated and stop gold from recovering sustainably.
Analyst compares the setup to 2008
Michael Armbruster, co-founder and managing partner at Altavest, said gold and stocks falling together is very reminiscent of 2008. He said gold bottomed by October that year and then climbed by more than 250% over the next three years.
He suggested prices could be headed higher over the longer term, particularly if the Fed leans toward rate cuts in 2027. For now, he said Altavest has advised gold bugs to keep their powder dry until year end. According to MarketWatch, Armbruster said: "Do not buy this dip, yet"
Sources: MarketWatch, Investing.com
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