NEW YORK: Gold recovered from a more than three-month low on Friday, but was headed for a second straight weekly decline as elevated energy prices fuelled inflation concerns and reinforced higher-for-longer rate expectations ahead of next week’s US Federal Reserve meeting.
Spot gold edged 0.2 percent higher to USD4,030.67 an ounce by 9:18 a.m. EDT (1318 GMT), after earlier slipping below the USD4,000 mark for the first time since mid-July to a session low of USD3,986.50. Bullion has lost 3.2 percent so far this week.
US gold futures for December delivery fell 0.3 percent to USD4,046.40 per ounce. Brent crude touched a more than five-month high, after Houthi attacks in Saudi Arabia stoked concern over further disruption to energy supplies.
“Heightened inflation concerns suggest that major central banks of the world won’t be able to ease monetary policies as quickly as they want to. All that’s working against the gold and silver market bulls at present,” said Jim Wyckoff, a market analyst at American Gold Exchange.
Additionally, “the sell-off in the stock market technology sector has prompted margin calls for those stock traders and investors, which is in turn prompting them to sell gold and silver assets,” Wyckoff added. Wall Street’s main indexes opened lower as caution prevailed after a sharp sell-off in AI-linked stocks.
Meanwhile, traders largely expect the Fed to leave interest rates unchanged at its October 27-28 meeting, although stronger-than-expected US consumer and producer inflation data released last week bolstered the case for tighter monetary policy later this year.
They see a 92 percent chance of the Fed leaving rates unchanged next week and an 83 percent probability of a December hike, according to CME’s FedWatch Tool.
The US Personal Consumption Expenditures report, the Fed’s preferred inflation gauge, on October 29 could offer further insight.
Elsewhere, gold buying picked up in India this week as lower prices during the major Dussehra festival boosted purchases and lifted premiums, while physical demand in top consumer China was steady even as cautious consumers continued to curb jewellery spending.
Among other metals, spot silver slid 1.3 percent to USD53.81 per ounce, and palladium dropped 0.4 percent to USD1,050.50, hitting their lowest since November 2025 and June 2025 respectively. Spot platinum fell 0.9 percent to USD1,557.03 per ounce, its lowest since July. All three metals were headed for weekly declines.