A broad sell-off hit multi-asset markets on Thursday, with gold falling below $4,100 an ounce, silver losing more than 2.4%, and Asian stock markets turning lower. The declines came as oil prices surged above $111 a barrel, fueling fears of higher inflation and prolonged U.S. interest rate hikes.
Oil Surges Above $111 on Iran Tensions
The main trigger for the sell-off was a sharp rise in crude oil prices. Drone and missile strikes by Yemen’s Houthi group on Saudi oil fields pushed Brent and WTI crude above $111 a barrel.
Higher oil prices raise fuel and transport costs, adding to inflation concerns and expectations that interest rates could stay high for longer. As a result, investors sold gold and silver despite their usual role as safe-haven assets during uncertain times.
Tensions between the U.S. and Iran also weighed on sentiment. President Donald Trump said the U.S. was “not negotiating” with Iran and that a development could come “fairly soon.”
Gold Falls to $4,087 as Fed Rate Fears Grow
Spot gold dropped more than 1% to around $4,087 an ounce, while silver plunged over 2.4% to about $56.20 an ounce.
Rising energy costs have increased expectations that the U.S. Federal Reserve will keep interest rates high for longer. Markets are now pricing in a possible 25-basis-point rate hike in December, while CME FedWatch data points to no change at the October meeting.
Higher rates and a stronger U.S. dollar can pressure precious metals because they do not pay interest.
The decline comes ahead of India’s biggest festival, Dhanteras and Diwali. Gold demand usually rises during the festive season, as people buy the metal out of faith and tradition. However, prices are seeing a sharp correction this year. Gold is trading at around ₹1.48 lakh per 10 grams, while silver stands at ₹2.25 lakh per kilogram.
Japan Loses ¥17.8 Trillion as Asian Stocks Slide
The sell-off spread to Asian shares, especially technology and semiconductor stocks. On Thursday, Japan’s Nikkei 225 fell 2.3% to around 62,942, as one-day market loss reached ¥17.8 trillion, while total losses since the June peak reached ¥147 trillion, with the index down 14%.
South Korea’s KOSPI dropped 2.7% to around 5,735. China’s CSI 300 fell as much as 1.6% to 3,654, leaving it about 20% below its June high.
Meanwhile, Hong Kong’s Hang Seng Tech Index slid around 4%, while the Hang Seng Index lost nearly 3%.
Bitcoin and Ethereum Also Turn Lower
Crypto markets also lost ground after their previous session’s gains. Total crypto market value slipped 0.2% to $2.87 trillion. Bitcoin fell below $83,000 after moving above $84,000, while Ethereum dropped under $2,445 after reaching $2,500.
With oil above $111 and rate concerns growing, traders are watching whether pressure will spread further across global markets.
