Analysis: Rising Fed Rate Hike Expectations Weigh Heavily on Spot Gold and Silver

Odaily reports, according to Gate data, spot gold and silver prices fell sharply. Spot gold broke below the $3,900 mark, dropping to $3,897.48/oz, down 3.08% intraday; spot silver fell 5.90% intraday to $49.09/oz, breaking below the $50 mark. Platinum fell 4.22% to $1,425.20/oz.

Foreign media analysis noted that the Federal Reserve on Wednesday held rates steady at 3.75% to 4.00% in a 10-2 vote, though two officials favored an immediate rate hike. US third-quarter GDP grew 3.4%, and Personal Consumption Expenditures (PCE) inflation reached 3.6%, further reinforcing market expectations for a Fed rate hike in December.

Notably, this round of gold and silver selling was not driven by a stronger dollar or rising US Treasury yields. On the day, both the dollar and Treasury yields pulled back, with capital rotating into the bond market after a selloff in tech stocks. The counterintuitive sharp decline in gold and silver suggests the market may be experiencing a liquidity-driven selloff, with investors forced to liquidate highly liquid precious metal assets to cover losses in other assets. Meanwhile, the gold-to-silver ratio rose to 79.4, reflecting that silver's decline was notably steeper than gold's.