Spot gold fell 0.6% to $3,998.35 an ounce and was down 4% for the week, its steepest weekly decline in over four months. Rising energy prices fueled inflation concerns and rate hike expectations ahead of next week’s Federal Reserve meeting.
Gold fell to a three-month low on Friday, slipping below $4,000 an ounce for the first time since mid-July. Spot gold was down 0.6% at $3,998.35, while December US gold futures settled 1.3% lower at $4,007.90.
Brent crude touched a more than five-month high after Houthi attacks in Saudi Arabia raised concerns about energy supply disruption. A market analyst said heightened inflation concerns could limit how quickly major central banks ease monetary policy. Traders saw a 92% chance the Fed would leave rates unchanged at its October 27-28 meeting and a 78% probability of a December hike.
The US Personal Consumption Expenditures report, due October 29, could offer further insight into inflation. Gold buying picked up in India as lower prices during the Dussehra festival boosted purchases and premiums, while physical demand in China was steady.
