Gold Stalls Around $4,000 as AI Fears Hit Markets

Gold steadied near its lowest close in more than three months, hovering around $4,025 an ounce. The metal had slipped almost 3% the day before, touching a level not seen since July 20. US equities dropped on Thursday and Treasury yields fell up to 20 basis points on some tenors, the steepest dip since August 2025, as traders rushed to bonds for safety. Analyst Justin Lin of Global X ETFs said the drop looks like a liquidity‑driven sell‑off, common when markets tumble sharply and investors need cash for margin calls and capital rules. He noted that gold is close to a key psychological barrier of $3,900 an ounce. Expectations that the Federal Reserve will raise rates again have eased, offering a modest boost to the metal. At the same time, investors are uneasy about how sustainable AI‑related spending will be, a major engine of US growth, and they now see less than a 10% chance of a quarter‑point hike at the Fed’s meeting next week. Lin expects a V‑shaped bounce for gold, citing lower rates, a slowdown in AI buying and capital outflows that could push the dollar down as positive factors. Spot gold was almost unchanged at $4,024.48 an ounce in Singapore at 8:10 a.m., while silver slipped 0.1% to $54.49, platinum fell 0.2% and palladium held steady. The Bloomberg Dollar Spot Index edged down 0.1%.

Context

Gold often benefits when interest rates are expected to stay low and when the dollar weakens. A slowdown in AI funding can reduce risk appetite, prompting investors to seek safe‑haven assets like gold.