Gold heads for weekly loss as oil-driven rate concerns pressure bullion

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Gold heads for weekly loss

Highlights

Spot gold falls 0.2% to $4,016.27 an ounce, heading for a 3.5% weekly drop, its worst since June, pressured by surging oil and rate concerns.
Oil prices jump 4% to a five-month high after Houthi attacks on Saudi Arabia, fueling fears of persistent inflation and higher Fed rates, undermining bullion demand.
HSBC cuts 2026 platinum and palladium forecasts amid weaker fundamentals as spot silver slides 1% to $53.98, platinum drops 0.1% to $1,568.58, and all three metals face weekly losses.

Oil surge and Fed outlook weigh on prices

As reported by Reuters, spot gold is down 0.2% at $4,016.27 an ounce by 0351 GMT after earlier touching its lowest level since July 20, while the market is heading for a 3.5% weekly fall, its worst performance since June.

U.S. gold futures for December delivery are falling 0.7% to $4,030.40. Monte Safieddine, head of market research at Capital.com, says speculators are trying to defend the key $4,000 level because a clear break below it would indicate the market is no longer pricing rate relief and is instead factoring in sticky inflation, elevated yields and a stronger dollar.

Oil prices rose about 4% to a five-month high on Thursday after Houthi attacks on Saudi Arabia raised concerns over further disruption to energy supplies. Higher energy prices are reinforcing expectations that the Fed keeps rates elevated for longer, increasing the opportunity cost of holding non-yielding bullion.

Safieddine says any further geopolitical escalation risks pushing oil prices even higher, reviving inflation fears, lifting yields and delaying Fed easing, a mix that remains difficult for gold.

Broader metals market braces for policy signals

Attention is now on the Fed's October 27-28 policy meeting and next week's Personal Consumption Expenditures data, the central bank's preferred inflation gauge as it targets a 2% rate. Traders are largely expecting the Fed to leave rates unchanged next week, although expectations for a December rate increase remain at 80%.

In the wider precious metals market, HSBC analysts cut their average 2026 platinum and palladium price forecasts in a Thursday research note, citing shifting market fundamentals and investor liquidation. Spot silver is sliding 1% to $53.98 an ounce, platinum is down 0.1% at $1,568.58 and palladium is steady at $1,054.50, with all three metals also heading for weekly declines.

Rising oil shipping costs linked to conflict risks have become a major new driver of fuel and consumer-price inflation, as tanker routes are disrupted and insurers and shippers add hefty risk premiums. In our earlier article, we noted that record freight rates and rerouting away from chokepoints like the Strait of Hormuz and the Red Sea are lifting the effective per-barrel cost of crude and could keep pressure on prices as long as geopolitical risks persist.

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