Gold on track for sharp weekly drop as oil price surge fuels rate concerns
Spot gold was quoted at $4,007.92 per ounce at 10:14 ET (12:14 GMT), down 0.4% from the previous session, placing it on a trajectory for a weekly decline of more than 3.7%. At the same moment, gold futures traded at $4,022.10 an ounce, slipping 0.9% and pointing to a projected weekly fall of 3.8%.
Brent crude futures climbed back above $115 a barrel, a level not seen since May, and recorded a weekly gain of over 3%. The oil price surge is being driven by renewed geopolitical tension, including media reports that the United States and Israel are weighing a new strike on Iran after the upcoming U.S. mid‑term elections, Iran’s warning of retaliation against Persian Gulf infrastructure, and continued Houthi attacks on Saudi sites that prompted Saudi Aramco to evacuate its Dhahran headquarters.
Analysts note that the higher oil price is likely to add to inflationary pressures ahead of the Federal Reserve’s policy meeting on 27‑28 October, where the central bank is expected to hold rates steady. However, a rate increase in December remains possible, as Fed officials have reiterated the need to bring inflation back to the 2 % target. The prospect of higher rates raises the opportunity cost of holding non‑yielding gold.
ING analysts observed that gold failed to benefit from a recent sell‑off in technology stocks and the usual flight to U.S. Treasury yields. They added that the market’s focus has shifted to the impact of rising oil prices on inflation and the consequent implications for central‑bank policy.
The article was authored by Scott Kanowsky, with reporting contributions from Ayushman Ojha, and was first published on 23 October 2026 at 07:28 am, with an update at 07:46 pm.