Gold and Silver Tumble as Strong U.S. Data Solidifies Rate Hike Bets

The latest economic data paints a picture of a resilient U.S. economy, with third-quarter GDP growth hitting an annualized 3.4%, comfortably outpacing expectations. This expansion, coupled with an annual inflation rate climbing to 3.6% in September, suggests the Federal Reserve will maintain its restrictive monetary policy stance to cool domestic demand. Despite a tech-led selloff on Wall Street and a retreat in Treasury yields, precious metals failed to attract safe-haven buying, as the prospect of higher interest rates continued to weigh on non-yielding assets.

Gold fell 1.03% to trade near $4,024.60 an ounce, while silver suffered a more significant 3.10% drop, settling near $52.180. These losses occurred even as crude oil prices softened, providing a modicum of relief from energy-driven inflation fears. Meanwhile, diplomatic efforts to ease tensions between Washington and Tehran offered little support to bullion prices, as the market remained fixated on the Federal Open Market Committee's path toward potential December tightening.

Equity markets provided a stark contrast to the broader economic outlook. While U.S. technology shares took a hit—pressured by Alphabet's 13.3% decline—European markets finished higher following the European Central Bank’s decision to hold rates steady. With the 10-year Treasury yield hovering near 5.0%, the dollar remains well-supported, effectively capping the upside for precious metals. Technical analysts note that gold now faces a stiff resistance zone between $4,084 and $4,146, while silver must reclaim the $54.680 level to reverse its current bearish trajectory.