Gold price falls to lowest level since mid-July
Gold fell 1% on Friday to $3,980.4 per ounce as US inflation rises and tensions in the Strait of Hormuz raise the chance that the US central bank will lift interest rates. Silver dropped even more sharply.
The price of gold slid on Friday, 30 October, to its lowest level since mid-July. The precious metal lost 1% during the day and reached $3,980.4 per ounce. The decline is being driven by rising inflation in the United States and heightened tension in the Strait of Hormuz, both of which increase the likelihood that the US Federal Reserve, the country's central bank, will raise its benchmark interest rate. The information comes from the newspaper The Economic Times.
Silver also cheaper
Silver also fell notably on Friday, losing 3.6% to $50.5 per ounce.
On a monthly basis, gold could decline in October for a second month in a row.
What analysts say
Analysts believe two factors are weighing on gold: the latest US economic growth data and rising inflation in the country.
US gross domestic product (GDP) grew 3.4% in the third quarter of this year compared with the same period a year earlier. That is faster than in the previous quarter, when growth in the world's largest economy was 2.2% in April–June. Economists had forecast third-quarter GDP growth of 3%, so the actual result exceeded expectations.
Higher interest rates generally make gold less attractive to investors, since the metal pays no interest income.
