Gold Falls Below $4,000 for First Time Since July as Oil Spike Fuels Rate-Hike Bets

Gold slipped below $4,000 an ounce Friday for the first time since mid-July, as surging oil prices stoked inflation fears and raised bets that the Federal Reserve will lift interest rates later this year, CNBC reported.

Spot gold fell 0.6% to $3,998.49 by mid-afternoon, a three-month low. It was down 4% for the week, on track for its worst week since June. December gold futures settled 1.3% lower at $4,007.90.

Silver fared worse. Spot silver slid 1% to $53.97 an ounce, its lowest level since November 2025. Palladium hit its lowest since June 2025, and platinum fell to its lowest since July.

Silver futures fell 1.9% to settle at $53.711, their lowest settlement since Nov. 26, 2025, The Wall Street Journal reported.

The slide leaves both metals far below the records they set in January. Gold touched $5,594.82 on Jan. 29 and silver reached $121.64 the same day, CNBC reported at the time.

At Friday’s levels, gold is roughly 29% below that peak. Silver has lost more than half its value.

Oil and the Fed

Brent crude touched its highest level in more than five months Friday after Houthi attacks in Saudi Arabia raised concern about further disruption to energy supplies, according to CNBC.

Higher energy costs feed inflation, and that makes rate cuts less likely and rate hikes more likely. Gold pays no interest, so it tends to lose appeal when rates are expected to rise.

“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,” said Jim Wyckoff, a market analyst at American Gold Exchange.

Wyckoff added that the selloff in technology stocks has triggered margin calls, forcing some investors to sell gold and silver to raise cash.

Traders see a 92% chance the Fed leaves rates unchanged at its Oct. 27-28 meeting, but a 78% chance of a hike in December, according to CME Group’s FedWatch tool.

Friday’s economic data added to the pressure. Year-ahead inflation expectations in the University of Michigan’s final October survey rose to 4.7% from 4.6%, while longer-term expectations climbed to 3.5% from 3.4%, Kitco News reported.

Both readings were the highest since May. A separate October survey of purchasing managers showed selling prices rising at the fastest pace since August 2022.

The Fed announces its decision at 2 p.m. Eastern on Wednesday. The September personal consumption expenditures report, the central bank’s preferred inflation gauge, follows Thursday morning.

“Any hawkish messaging, especially if oil keeps climbing, would likely extend bullion’s losses,” Konstantinos Chrysikos of Kudo said in a note cited by the Journal.

Not every analyst is bearish. Peter Cardillo of Spartan Capital said investors are raising cash and that Russia is selling gold holdings as the war strains its economy.

“Nonetheless, while the risk of further downside remains, we would selectively buy at these levels,” Cardillo said.

Physical buyers are already stepping in. Gold purchases in India picked up this week as lower prices during the Dussehra festival lifted demand, while buying in China held steady, according to CNBC.

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