Gold Hits 7-week Low

Gold prices fell below $4,000 an ounce on Friday, hitting their lowest level since mid-July and putting the precious metal down almost 4% for the week, as rising oil prices strengthened expectations that US interest rates will remain higher for longer. Brent crude surged to a four-year high after Houthi attacks in Saudi Arabia heightened concerns over further energy supply disruptions. Meanwhile, recent US data showed consumer and producer inflation rising more than expected, largely driven by higher energy costs, reinforcing concerns over persistent inflationary pressures. Despite this, Federal Reserve officials are widely expected to leave interest rates unchanged at their October 27–28 meeting. Markets currently price in just a 10% chance of a rate hike next week, compared with odds of around 80% for December, according to CME’s FedWatch Tool. Investors now await US PCE inflation data due October 29 for further clues on progress towards the Fed’s 2% inflation target.

Gold decreased below 4000, according to trading on a contract for difference (CFD).

Gold prices stabilized around $4,030 an ounce on Friday, hovering near three-month lows and leaving the precious metal down around 3% for the week, as rising oil prices have fueled expectations that US interest rates will remain higher for longer. Brent crude climbed to a more than five-month high after Houthi attacks in Saudi Arabia heightened concerns over further disruptions to energy supplies. Meanwhile, US consumer and producer inflation data released last week came in hotter than expected, largely reflecting rising energy costs and reinforcing the case for tighter monetary policy. However, Fed officials are still widely expected to leave rates unchanged at their October 27–28 meeting. Markets currently assign just a 9% probability to a rate hike next week, compared with more than 80% for December, according to CME’s FedWatch Tool. Investors also await US PCE inflation data on October 29 for further clues on progress towards the Fed’s 2% target.