Gold steadies after three-month lows as oil rally fans inflation worries
GLD•Gold steadied after falling to $3,986.50 an ounce, its lowest since July 20, and was down 3.5% for the week. Rising oil prices fueled expectations that interest rates could stay higher for longer, weighing on bullion.
1. Gold near three-month low
Spot gold was at $4,023.95 an ounce by 1210 GMT on Friday after earlier reaching $3,986.50, its lowest since July 20. Bullion was down 3.5% for the week, its second consecutive weekly decline, while December U.S. gold futures fell 0.5% to $4,038.40.
2. Oil and rate expectations
Rising oil prices fueled expectations that Federal Reserve rates could remain higher for longer, reducing gold’s relative attractiveness, Hamad Hussain, an economist at Capital Economics, said. Brent crude touched a more than five-month high after Houthi attacks in Saudi Arabia raised concerns about energy supply disruptions. Market expectations of a rate hike were 9% for the Fed’s October 27–28 meeting and 81% for December.
3. Other precious metals fall
Silver fell 1.3% to $53.84 an ounce and palladium dropped 0.6% to $1,047.69, while platinum edged down 0.8% to $1,558.18. All three metals were headed for weekly declines.
