Gold Tumbles as $100 Oil Sparks Inflation Fears
Gold prices fell on Friday despite concerns about war risks as investors continued to be wary of inflationary pressures and potential interest rate hikes. The precious metal's price slipped 0.4% to $4,030.09 an ounce by 0333 GMT, marking a decline of more than $130 from its two-week high set on Wednesday.
The drop in gold prices comes as Brent crude oil surged above $100 a barrel for the first time since May, raising concerns about inflation and the interest rate outlook ahead of next week's Federal Reserve meeting. The European Central Bank kept its deposit rate at 2.25% on Thursday and maintained a data-dependent approach, leaving policymakers room to tighten again if energy costs keep inflation elevated.
Brian Lan, managing director of GoldSilver Central, noted that gold's repeated recoveries around $4,000 suggest the level has become an important short-term anchor for the metal. However, higher energy costs are strengthening the case for tighter monetary policy, which is capping safe-haven demand for gold in the short run.