Gold fell sharply on Friday, with the spot price dropping about $85, or 1.8%, to roughly $4,564 an ounce, as stronger-than-expected US inflation data undercut hopes for interest-rate cuts.
The decline came as part of a broader risk-off move that also dragged silver lower. Higher interest rates tend to weigh on gold, which pays no yield, by raising the appeal of interest-bearing assets.
Consumer prices in the United States rose 3.8% in the year to April, exceeding forecasts on both a monthly and annual basis. Producer prices recorded their steepest single-month increase since early 2022.
The figures, driven in large part by an energy shock linked to the war with Iran, have all but closed the door on near-term rate cuts by the Federal Reserve and prompted some economists to weigh the possibility of a rate increase later this year.
Friday’s level left gold about 18% below the record high of $5,589 an ounce reached in January. Even after the pullback, the metal remains up by more than a quarter since early 2025.
Analysts said gold’s longer-term support — persistent inflation, geopolitical risk and central-bank buying — remained in place, but that the immediate path would depend heavily on the outlook for US monetary policy.