Gold Edges Lower on Fed Rate Hike Concerns

Gold tumbled below $3,900 an ounce, touching its lowest level since October 2025, as rising energy prices and persistent inflation concerns reinforced expectations that US interest rates will remain elevated for longer. Major central banks, including the Federal Reserve and the European Central Bank, held rates steady this week but signaled that the fight against inflation is not yet over, highlighting the risks posed by surging energy costs. Meanwhile, US data released Thursday showed inflation accelerating in September, with core price growth also picking up, strengthening expectations of a potential Fed rate hike in December. Gold also came under pressure from a sharp sell-off in technology stocks, driven by concerns over rising AI-related spending, which may have triggered forced selling and margin calls across markets. At the same time, oil prices climbed on fears of an escalation in the Middle East conflict, while physical gold demand across key Asian markets remained subdued.

Gold decreased to 3937.00 USD/t.oz, the lowest since November 2025. Over the past 4 weeks, Gold lost 5.68%, and in the last 12 months, it decreased 1.59%.

Gold prices declined below $4,000 per ounce on Friday, extending losses from the previous session as persistent inflation and resilient economic growth in the US reinforced expectations of a potential Federal Reserve rate hike later this year. The US PCE price index increased 0.5% month-on-month in September, marking its biggest rise since March, while annual inflation accelerated to 3.6%. Core PCE inflation also climbed to 3.1% year over year. Meanwhile, US GDP expanded at an annualized rate of 3.4% in the third quarter, exceeding expectations of 3.2%, supported by resilient consumer spending and strong AI-related investment. The Federal Reserve kept interest rates unchanged on Wednesday ahead of next week’s US midterm elections, although markets continue to assign roughly a 75% probability of a rate hike in December, according to the CME FedWatch Tool. Gold is on track to decline nearly 4% in October, potentially recording its second consecutive monthly loss.