Gold drops over 2 percent,
silver nearly 5 percent

Thursday was a tough day for gold and silver. At 17:55 Belgian time, Kitco quoted gold at 4,053 dollars per troy ounce, down 87.30 dollars or 2.11 percent from Wednesday. The day’s range ran from 4,145.30 to 4,044.30 dollars. TradingEconomics showed 4,054 dollars at the same time, a loss of 2.10 percent.

Silver fell even further. Kitco had the white metal at 55.04 dollars, down 2.81 dollars or 4.86 percent. During the day it even dipped to 54.90 dollars. TradingEconomics shows 55.16 dollars and a loss of 4.82 percent.

Oil above 112 dollars

The trigger came from the Middle East. New attacks, including Houthi strikes on facilities in Saudi Arabia, pushed the oil price up. Brent, the European benchmark for crude, rose above 112 dollars a barrel according to Kitco, its highest level since May. TradingEconomics confirms that Brent is at its highest since May.

That may seem odd. Global tension normally pushes gold higher, because investors look for a safe place for their money. That already failed to happen once this summer, as we explained in our piece on why gold fell despite the war with Iran. This time too, interest rates are winning out over fear.

Why the gold price is falling today

Expensive oil makes life more expensive, so inflation stays high. That forces the US central bank, the Fed, to keep rates high. According to Kitco, the market sees roughly an 86 percent chance that the Fed will raise rates by a quarter point in December. For the meeting on 27 and 28 October, the market mainly expects no change.

A second figure did not help. New claims for unemployment benefits in the United States fell to 194,000 according to Kitco, lower than expected. A strong labour market gives the Fed less reason to cut rates. US inflation for September had already come in higher than expected, as we wrote on 14 October in our piece on silver plunging nearly 6 percent.

Gold pays no interest. When saving or holding bonds becomes more attractive, some investors sell their gold.

Through the 4,070 dollar support

For traders, there is another reason this day stands out. According to FXStreet, a support zone around 4,070 dollars had stopped every decline since late September. On Thursday gold fell clearly below it. FXStreet points out that the next foothold lies near 4,000 dollars, the level of the lows from late July and early August.

According to TradingEconomics, gold is now about 5.5 percent lower than a month ago. Compared with last Thursday, when gold stood around 4,144 dollars, it is more than 2 percent lower. Silver even lost about 14 percent over the month.

What this means if you want to sell old gold

If you have a box of broken chains, old rings or a gold watch lying around, their value is moving with the price this week. The gold itself does not change. An 18 carat ring always contains 750 thousandths of pure gold. The price only determines what that amount is worth on a given day.

The January peak, when gold stood above 5,500 dollars, is now well behind us. You can find the current level in euros on our gold price today page. How we determine the fineness of old jewellery and weigh it correctly is explained under sell old gold.

Selling silver after a drop of nearly 5 percent

For silver cutlery, dishes and old coins it was an even harder day. Kitco recorded a gold to silver ratio of 73.6: you need more than 73 ounces of silver to buy one ounce of gold. Silver has been doing worse than gold for weeks.

Here too, a spoon of 800 thousandths contains a fixed amount of pure silver. How we tell solid silver from silver plated items is explained under sell silver.

What matters in the coming days

The Fed meets next Tuesday and Wednesday. Any hint about a hike in December can move gold and silver again. Beyond that, the oil price remains the big unknown. A new attack in the Middle East could drive up the price of a barrel again, while a calmer tone could bring it down.