Gold drops over 1% on higher oil prices; US payrolls data in focus
- Spot gold fell 1.1% to $4,044.09 per ounce
Gold prices slipped as rebounding oil prices fanned inflation worries and higher interest rate expectations, with investors awaiting key US payrolls data amid a risk-off market.
- Impact of crude oil rebound on gold prices.
- Federal Reserve's interest rate hike expectations.
- Goldman Sachs' revised gold price forecast.
Gold prices slipped on Friday as oil prices rebounded, fanning inflation worries and higher-for-longer interest rate expectations, while investors awaited key US payrolls data later in the day.
Spot gold fell 1.1% to $4,044.09 per ounce by 0501 GMT, but was on track for its best week since late August.
US gold futures for December delivery dropped 1.5% to $4,053.30.
“Crude oil has rebounded mostly over the past day, which remains one of the inflationary knockbacks pressuring gold,” said Ilya Spivak, head of global macro at Tastylive.
Oil rose more than 1% even as it was on track for a sharp weekly drop on expectations of a de-escalation in the Iran conflict after the US election results, while persistent Middle East supply concerns continued to support prices.
Higher energy costs can reinforce expectations that the Federal Reserve will keep interest rates elevated for longer, pressuring the non-yielding bullion.
Asia’s tech-heavy markets crumbled as fear of increased regulatory scrutiny and a slowdown in AI build-out unleashed the steepest fall in US stocks since the tariff-triggered “Liberation Day” rout in April 2025.
“In risk-off conditions like this, we’re seeing gold positions get liquidated to free up cash and cover margin calls elsewhere.
It’s not the first time we’ve watched this dynamic temporarily override gold’s usual safe-haven appeal,“ said Tim Waterer, chief market analyst at KCM Trade. The US non-farm payrolls report is due at 1330 GMT.
Traders currently see a 68% chance that the Fed will raise rates in December, down from the near certainty expected last month, according to CME’s FedWatch tool.
On Thursday, two Fed officials made a case for modest and steady rate increases to tackle above-target inflation.
Elsewhere, Goldman Sachs on Thursday lowered its end-2026 gold price forecast to $4,150 per ounce from $4,650, citing the Fed’s more hawkish stance.
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Among other metals, spot silver fell 0.5% to $51.51 per ounce; platinum dipped 0.3% to $1,512.83 and palladium dropped 1.1% to $1,020.10.
However, all three metals were headed for weekly gains.