Gold tumbles 3% to a one-year low as Iran peace hopes fade and inflation fears bite

Spot gold dropped 2.7% to $3,880.93 an ounce by 1:53 p.m. ET, after touching its lowest point since October 2025 earlier in the day. US gold futures for December delivery settled 2.9% lower at $3,885.30 an ounce. It was the metal's third consecutive session in the red, capping a roughly 3% slide.

The trigger came from Washington. President Donald Trump said on social media that the US does not need a deal with Iran, killing hopes of an agreement to end the conflict. Oil climbed on the news, stoking inflation concerns and expectations the Federal Reserve keeps interest rates elevated for longer. Higher rates dull the appeal of non-yielding bullion. David Meger, director of metals trading at High Ridge Futures, put it plainly: higher energy prices warrant a hawkish Fed, and that's a headwind for gold.

Jim Wyckoff, a market analyst at American Gold Exchange, pointed to a hot US inflation reading on Tuesday, hawkish comments from Fed officials this week and a dollar rally to a near 19-month high as forces pressing the gold market lower. Traders now see an 87% chance of a 25-basis-point rate hike in December, and the odds of a bigger 50-basis-point move also rose.

The drop tripped stop-losses on long positions built over the past two weeks, when bullion was recovering from an earlier slump in tech shares driven by worries over AI spending, according to independent metals trader Tai Wong. Nvidia CEO Jensen Huang's exit stirred concerns about the future of the AI heavyweight and could have far-reaching consequences for US chip export policy.

The pain spread across the metals complex. Spot silver fell 3% to $50.12 an ounce after hitting its lowest since November 4, spot platinum lost 1.2% to $1,518.49 after touching its lowest since November 6, and spot palladium dropped 3.1% to $995.91, a day after reaching its highest level since October 22. Investors now wait on US producer price index data due Friday.