Gold prices dipped on Friday, setting the stage for their sharpest weekly drop in over four months. The decline comes as rising oil prices have reinforced expectations that the Federal Reserve will maintain higher interest rates for an extended period. Spot gold fell 0.2% to $4,016.27 per ounce, while US gold futures for December delivery dropped 0.7% to $4,030.40. The metal has lost 3.5% this week, marking its worst performance since June.
Analysts note that investors are closely defending the $4,000 level for gold, as a breach below this point could signal shifting market sentiment toward sticky inflation, elevated yields, and a stronger dollar. Monte Safieddine, head of market research at Capital.com, highlighted the challenges facing bullion in the current environment. Oil prices surged about 4% to a five-month high on Thursday following Houthi attacks on Saudi Arabia, which raised concerns about energy supply disruptions.
The focus now shifts to the Federal Reserve's policy meeting on October 27-28 and next week's Personal Consumption Expenditures (PCE) data release. While traders expect the Fed to keep interest rates unchanged next week, there is an 80% chance of a rate hike in December. Meanwhile, HSBC lowered its 2026 price forecasts for platinum and palladium, citing changing market dynamics and investor liquidation.
Other precious metals also saw declines. Spot silver slid 1% to $53.98 per ounce, platinum fell 0.1% to $1,568.58, and palladium steadied at $1,054.50. All three metals are on track for weekly losses.