Gold prices fell 3% on Friday (November 14th) due to a broader market sell-off, triggered by hawkish remarks from US Federal Reserve officials, which dimmed hopes of a December interest rate cut.

Spot gold prices fell 1.9% to $4,092.72 an ounce, as of 2:33 PM ET (19:33 GMT), after falling more than 3% earlier in the session. However, bullion is up 2.3% so far this week. US gold futures for December delivery closed 2.4% lower at $4,094.20.

"The notion that we're going to see a smaller chance of a Fed rate cut in December is what's weakening the gold and silver markets," said David Meger, director of metals trading at High Ridge Futures.

Equity markets plummeted following the global sell-off triggered by the Fed's hawkish signals. The longest-ever US government shutdown, which ended Thursday, created a significant data gap, leaving the Fed and traders in limbo ahead of next month's policy meeting.

Investors had hoped the latest data would show an economic slowdown, giving the Fed room to cut interest rates in December, boosting the appeal of non-yielding gold. Those expectations have dimmed as more Fed policymakers have adopted a cautious stance against further monetary easing.

Market expectations for a 25 basis point rate cut next month have fallen to nearly 46%, from 50% earlier this week, according to CME Group's FedWatch data. Non-yielding gold tends to perform well during periods of economic uncertainty and in low-interest-rate environments.

"When margin calls and liquidations occur, traders close all assets to free up margin... This partly explains why gold is also declining in this risk-off environment," said Fawad Razaqzada, market analyst at City Index and FOREX.com, in a note. Meanwhile, demand for physical gold in major Asian markets has weakened this week.

In other metals, spot silver edged down 2.8% to $50.84 an ounce, but was on track for weekly gains, up 5.2% so far.(alg)

Source: Reuters