Gold prices fell below $4,100 an ounce on Thursday, while silver declined around 3.6%, as rising oil prices fueled inflation concerns and expectations that interest rates could remain elevated.
Gold traded at $4,088.95 an ounce, down $52.15, or 1.26%, as of 0800GMT, while silver dropped $2.07, or 3.57%, to $55.89 an ounce.
Both metals gave back gains from the previous session as renewed tensions in the Middle East pushed crude prices higher.
Oil prices advanced following a drone strike on Saudi Aramco’s Shaybah oil field that killed two people. The US also ordered some personnel and family members to leave its diplomatic missions in Saudi Arabia.
Higher energy prices heightened concerns over persistent inflation, weighing on expectations for monetary easing.
The US Federal Reserve is widely expected to leave interest rates unchanged next week, with remarks by Chair Kevin Warsh last Friday doing little to shift expectations for a pause, according to market commentary.
Markets continued to anticipate a possible rate increase in December as energy-driven inflation pressures persisted.
Although gold is traditionally viewed as a hedge against inflation, higher interest rates can reduce its appeal by increasing the opportunity cost of holding assets that offer no interest income.
The European Central Bank and the Bank of Japan are also expected to maintain their current interest rates next week.
The latest declines left gold down 4.62% over the past month, while silver lost 13.11% over the same period.