Gold set for steep weekly loss as rising oil prices bolster Fed rate hike bets
GLD•Gold fell to a three-month low and was down 4% for the week, its steepest weekly decline in more than four months, as higher oil prices reinforced inflation concerns and US rate expectations. Brent crude reached a more than five-month high.
1. Gold extends losses
Spot gold fell 0.6% to $4,000.59 an ounce by 11:20 a.m. EDT, after briefly dropping below $4,000 for the first time since mid-July and touching $3,975.23. It was on track for its worst week since June. December US gold futures fell 1.1% to $4,014.60 per ounce.
2. Rates and oil pressure
Brent crude reached a more than five-month high after Houthi attacks in Saudi Arabia raised concerns about further disruption to energy supplies. Jim Wyckoff of American Gold Exchange said heightened inflation concerns could slow central banks’ monetary easing, weighing on gold and silver. He added that technology-stock selling had prompted margin calls and sales of precious metals.
3. Fed and demand outlook
Traders saw a 92% chance the Fed would leave rates unchanged at its October 27-28 meeting and an 83% probability of a December rate hike. The US Personal Consumption Expenditures report, due October 29, could offer further insight. In India, lower prices during Dussehra boosted gold purchases and premiums; demand in China was steady.
