Gold and Silver Prices Drop as Tech Shares Slump, Interest Rates Rise

Global precious metals markets experienced significant declines on Friday, with gold and silver prices falling to their lowest levels in over a year. Gold dropped to $3,897.1 an ounce, its lowest point since October 2025, while silver fell below $50 an ounce for the first time in 11 months, reaching $49. The slump in technology shares, driven by concerns over artificial intelligence (AI) spending, contributed to the decline in precious metals.

On the COMEX exchange in New York, gold futures for December delivery decreased by 3.5% to $3,891.9 an ounce, and silver futures fell by 6.5% to $49. The Nasdaq Composite, a US index heavily weighted towards technology companies, saw a 3.7% drop to 25,211.8 points. Analysts from Commerzbank suggested that the sharp fall in technology shares may have triggered forced selling of safe-haven assets like gold and margin calls.

Tai Wong, an independent metals trader, noted that earnings had been the driving force behind the rally in AI stocks, but this support was now weakening. Gold has seen a 30% decrease from its record high of $5,595 an ounce in January, as investors anticipate that interest rates will remain elevated for an extended period. The US Federal Reserve maintained its benchmark interest rate between 3.75% and 4% on October 28, with a 10-2 vote, citing elevated inflation levels.

Central banks have been significant buyers of gold, purchasing 289 tonnes in the second quarter of 2026, a 62% increase year-on-year, according to the World Gold Council. This trend is expected to continue, with central banks likely to maintain strong buying, although possibly at a lower rate than in 2025. Analysts indicate that central bank demand for gold tends to increase when its price trades below $4,000 an ounce.

Other white metals, including silver, platinum, and palladium, also experienced significant declines this week, with drops ranging from 7% to 9%, compared to a 2% decrease in gold.