Oil Prices Surge to Decade-Highs Drag Down Gold to 8-Week Low

Gold futures for December delivery (GCZ2026) plummeted by $88.70, or 2%, to close at $4,358.50 on Thursday, marking its lowest level since August 6th and breaking beneath the 50% retracement that had been acting as support.

The decline was driven by two key inflationary factors: a rise in producer prices and a sharp increase in oil prices.

Thursday's release of the Producer Price Index for August showed producers paid more for raw materials, which is typically passed on to consumers. The PPI rose 0.4% month-over-month, with annual producer inflation accelerating to 5.4%, exceeding market expectations of 5.3%.

The second major driver was a huge spike in oil prices, with WTI crude shooting past $100 and advancing by $7.26 or 7.51%. The closing price of $103.93 is the highest since 2014.