Gold Drops 3.37% as S&P 500 Posts Its Worst Day Since June

Gold fell alongside U.S. stocks Friday, showing the metal did not shield investors from losses during a session when the S&P 500 logged its sharpest decline since June.

Spot gold was $3,884.90 per troy ounce at 4:07 p.m. ET (20:07 UTC) on Oct. 30, down $135.60, or 3.37%. At the close, the S&P 500 was down 1.8% at 7,580.07, the Nasdaq Composite fell 2.9% to 25,437 and the Dow Jones Industrial Average lost 1.1% to 51,770.31. The gold figure is an afternoon spot quote; the stock index figures are closing levels.

Gold had slipped under $4,000 earlier in the week, reaching $3,999.81 on Oct. 27. Friday's decline extended that move as stocks also fell, though the figures do not capture identical observation times.

The Federal Open Market Committee voted 10-2 on Oct. 28 to keep its target range at 3.75%-4.00%. Lisa D. Cook and Beth M. Hammack favored a quarter-point increase. The committee's statement said, “Inflation remains elevated.” Because gold pays no direct yield, higher interest rates can make assets that pay interest more attractive by comparison.

Cash needs can also pressure gold during a broad selloff. In its review of the March 2020 market turmoil, the World Gold Council wrote, “As a high quality, liquid asset gold may also have been used to raise cash.” Investors selling liquid holdings to raise cash can push gold lower alongside riskier assets.

These market moves show why gold's role as a safe haven depends on the period being examined. The metal can decline during an abrupt rush for liquidity, even when investors are seeking protection. Friday's simultaneous losses show gold can fall during an equity selloff, but one session offers little evidence about its performance over a prolonged downturn.