Gold prices fell 3 percent on Thursday to reach their lowest point in over a year.
International market fluctuations and a strong United States dollar fueled the downward trend across domestic bullion exchanges. Analysts noted an inverse relationship between the dollar and gold, where a strengthening currency makes bullion purchases more expensive for investors holding other currencies, thereby dampening demand. WisdomTree commodity strategist Nitesh Shah said that current gold valuations are undervalued, noting a strong support level near 3,850 dollars per ounce. Earlier, on Thursday, gold prices dropped 3 percent to hit their lowest level in over a year following rising oil prices driven by diminished prospects for peace in the Middle East.
New York Federal Reserve Bank President John Williams said that while the economy remains generally sound, the central bank may need to implement further interest rate hikes to reduce elevated inflation. CME FedWatch Tool data indicated an 89 percent probability that the central bank might increase interest rates by 25 basis points in December, alongside an 11 percent probability for a 50 basis point increase.
Reuters polls indicated that the European Central Bank is expected by most economists to implement what could be the final deposit interest rate increase of the current cycle next month. Financial market participants also awaited United States producer price index statistics scheduled for release on Friday afternoon.
In New York trade, gold futures declined 0.77 percent to 3,969.77 dollars per ounce.
International silver values fell by about 1.17 percent to 51.06 dollars per ounce.
Retail prices for 24-carat and 22-carat gold varied across metropolitan centers.