Gold fell below $4,100 per ounce on global markets on Thursday, while silver lost more than 3.5% amid rising oil prices following events in Saudi Arabia. As of 08:00 GMT, gold was trading at $4,088.95 per ounce, down $52.15, or 1.26%. Silver fell by $2.07, or 3.57%, to $55.89 per ounce, Anadolu Agency reports.
Rising oil prices
Both precious metals gave up the gains of the previous session after heightened tensions in the Middle East pushed up oil prices. Oil prices rose after a drone strike on Saudi Aramco's Shaybah oil field in Saudi Arabia, which killed two people. The United States also ordered some personnel and their family members to leave diplomatic missions in Saudi Arabia.
Rate expectations
Rising energy costs intensified concerns about persistent inflation and weakened expectations of monetary policy easing. According to market estimates, the US Federal Reserve will leave interest rates unchanged next week. Comments by Fed Chair Kevin Warsh last Friday, according to market estimates, had little impact on expectations of a pause.
Markets also continued to expect a possible rate hike in December due to energy-related inflationary pressures. The European Central Bank and the Bank of Japan are also expected to leave rates unchanged next week. Over the past month, gold has fallen by 4.62%, while silver has declined by 13.11%.
Gold is traditionally considered a hedge against inflation, but higher interest rates reduce its appeal because holding the asset generates no interest income.
