Gold retreats over 1% as oil gains revive bets on tighter Fed policy
Spot gold fell 1.1% to $4,094.90 an ounce, its weakest level since mid-October. Reuters reports that higher oil prices are reinforcing expectations of elevated rates.
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what happened
Gold lost more than 1% on Thursday after crude prices climbed, feeding inflation worries and strengthening the view that borrowing costs may stay elevated for a long time, according to Reuters. Investors are waiting for the Federal Reserve's meeting next week for signals on where policy is headed. Spot gold dropped 1.1% to $4,094.90 an ounce by 0333 GMT, its weakest level since mid-October. December gold futures in the US slipped 0.9% to $4,111.40. Silver, platinum and palladium also declined, by 2.6%, 2.1% and 2.6% respectively.
why it matters
Higher oil prices lift inflation expectations, which could mean tighter monetary policy later and make non-yielding bullion less attractive. CME FedWatch data cited by Reuters shows traders see about a 16% chance of a hike at the October 27-28 meeting but roughly 90% odds of one in December. The PCE inflation report due next week is a key gauge for the Fed's 2% target.
market impact
Gold and silver: expectations of higher rates reduce appeal of non-yielding metals, adding pressure on prices
tags
instruments
sources
- Gold drops over 1% as oil rally reinforces higher-for-longer rate outlook — Reuters, 22 October 2026 at 04:02 UTC
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