Gold prices fell on Friday, heading for their sharpest weekly decline in four months. Strong US economic data and rising oil prices pushed the metal to its lowest level since August 3. Investors now expect the Federal Reserve to keep interest rates higher for longer, which hurt gold’s market appeal.
Gold prices took a hit on Friday amid strong indicators of US economic growth and climbing oil prices. Spot gold prices sank to their lowest since August, and US gold futures mirrored the drop. Positive employment figures showed a decrease in unemployment claims, hinting at stronger job growth in October.
Gold prices eased on Friday and were set for their sharpest weekly decline in more than four months as surging oil prices and resilient US economic data fuelled expectations that the Federal Reserve would keep interest rates higher for longer.
FundamentalsSpot gold was down 0.1% at $4,018.69 per ounce by 0036 GMT, touching its lowest level since August 3. The metal fell 3.4% for the week so far, recording its biggest weekly decline since June.
US gold futures for December delivery dropped 0.6% to $4,033.70.
Oil prices rose about 4% to a five-month high on Thursday after Houthi attacks in Saudi Arabia stoked concerns of further disruption to energy supplies.
Elevated energy prices bolster expectations of higher-for-longer interest rates by the Fed, increasing the opportunity cost of holding non-yielding bullion.
The number of Americans filing new claims for unemployment benefits dropped to near 57-year lows last week, suggesting a modest pickup in job growth in October.
Focus has turned to the Fed's October 27-28 policy meeting and next week's Personal Consumption Expenditures (PCE) data, a key gauge closely watched by the central bank as it targets a 2% inflation rate.
Traders are pricing in as low as a 7% chance of an interest rate hike next week, but expectations for a hike in December remain at 81%.
India has issued permits to import around 6,500 metric tons of silver over the next six months as the world's biggest consumer of the precious metal seeks to meet festive-season demand, four bullion dealers who received the permits told Reuters.
HSBC cut its average 2026 platinum and palladium price forecasts in a research note on Thursday, citing shifting market fundamentals and investor liquidation, while adding that both metals have room to recover.
Among other metals, spot silver edged 0.1% lower to $54.46 per ounce, platinum slid 0.4% to $1,563.67 and palladium dropped 0.5% to $1,051.00. All three metals headed for weekly declines.