Spot gold eased 0.3% to $4,013.91 an ounce by 21:26 ET (01:26 GMT) on Friday, trading below levels seen earlier in the week and marking its lowest price since July 20. U.S. gold futures also moved lower, falling 0.7% to $4,031.50. The yellow metal had plunged 2.8% on Thursday and was headed for a weekly decline of more than 3.5%.
Markets were focused on energy after a fresh upswing in crude prices. Brent crude futures climbed to as high as $114 per barrel on Friday, a five-month peak, after attacks by Yemen's Houthi group in Saudi Arabia raised alarms about potential disruptions to supplies from the region. The rise in oil reinforced concerns that energy-driven price pressure could feed through to broader inflation measures.
Higher crude prices carry the risk of pushing inflation higher, which could encourage central banks to keep monetary policy restrictive for longer. That dynamic works against bullion: while gold is often used as an inflation hedge, elevated interest rates increase the opportunity cost of holding a non-yielding asset.
Recent U.S. consumer and producer inflation readings came in hotter than expected, adding weight to the argument for tighter policy. Despite those prints, Federal Reserve policymakers were widely expected to leave interest rates unchanged at their October 27-28 meeting. Market pricing at the time reflected a 78% probability of a rate hike in December, according to CME's FedWatch Tool.
The decline in gold was mirrored across other precious metals. Spot silver was reported down 1% to $54.038 an ounce on Thursday, while platinum traded flat at $1,567.10 per ounce. Additional price moves reported for the session showed silver had declined nearly 6% on Thursday and platinum had slipped 3.6%.
Traders and investors are weighing the tug-of-war between inflation protection and rising real yields. The recent rotation in commodity markets - led by crude - has shifted risk sentiment and prompted re-pricing across rate-sensitive assets. The immediate consequence has been weaker demand for precious metals, reflected in the weekly losses for gold and marked declines in silver and platinum.
For now, the market snapshot is one of heightened uncertainty: oil-driven inflation fears point toward a potentially longer period of restrictive policy, while the Fed's near-term posture appears unchanged. How this balance evolves will determine whether the current pullback in metals proves temporary or part of a more sustained correction.
Market data cited in this report:
- Spot gold: $4,013.91 per ounce (down 0.3%) as of 21:26 ET (01:26 GMT)
- U.S. gold futures: $4,031.50 (down 0.7%)
- Thursday move: gold slipped 2.8%; set for weekly loss >3.5%
- Brent crude: up to $114 per barrel (five-month high)
- Spot silver: $54.038 an ounce (down 1% on Thursday); silver also reported as down nearly 6% on Thursday
- Platinum: $1,567.10/oz (traded flat); platinum also reported as having slipped 3.6% on Thursday
- Fed meeting expectation: rates widely expected to be left unchanged at Oct 27-28 meeting
- Market-implied probability of a December hike: 78% (CME FedWatch Tool)