Gold prices dropped to their lowest level since July 2026, reflecting broader market volatility driven by concerns over inflation and geopolitical tensions. The decline came as energy prices surged, with Brent oil climbing above $115 per barrel amid escalating violence in the Middle East. The Federal Reserve's upcoming policy meeting added to the uncertainty, with investors closely watching for signals on future interest rate moves.
The precious metal fell as much as 1.2%, trading around $3,975 an ounce. The drop coincided with a weakening in US consumer sentiment, which hit a five-month low in October. High prices and rising interest rates have weighed on consumer morale, further fueling inflation worries.
The combination of rising energy costs and deteriorating consumer confidence has reinforced fears that inflation may remain stubbornly high. This has put downward pressure on gold, traditionally seen as a hedge against inflation, as investors reassess their positions ahead of the Fed's decision.