Gold fell more than 1% in Asian trading on Thursday, slipping below $4,100 an ounce as renewed threats to Middle Eastern energy supplies reinforced expectations that US interest rates will stay elevated.
Spot bullion declined 1.1% to $4,094.90 by 0333 GMT, its weakest since October 14, while December gold futures lost 0.9% to $4,111.40. Silver tumbled 2.6%, extending the weakness across precious metals.
The sell-off came despite traders assigning only a 16% probability to an interest-rate rise at next week’s Federal Reserve meeting.
They see a roughly 90% likelihood of another increase in December , leaving gold exposed to restrictive policy even if the Fed pauses in October.
Gold price today: An October pause offers little protection
The pressure begins in the oil market. Fresh attacks linked to Yemen’s Houthi movement have revived concerns about Saudi energy infrastructure and Gulf shipping, threatening another increase in fuel costs.
Expensive crude can feed into consumer prices and make it harder for the Fed to bring inflation back towards its 2% target. That, in turn, supports expectations for higher bond yields, increasing the opportunity cost of owning gold, which pays no interest.
OANDA senior market analyst Kelvin Wong said a sustained oil rally could strengthen expectations of prolonged monetary tightening, with elevated yields at both ends of the Treasury curve limiting bullion’s appeal.
The Fed meets on October 27–28. Its preferred inflation gauge, the September personal consumption expenditures price index, arrives on October 29, meaning policymakers must decide before seeing that report.
Silver’s slide clashes with resilient ETF demand
The selling was not confined to gold. Spot silver dropped 2.6% to $56.44 an ounce, platinum lost 2.1% to $1,594.25 and palladium fell 2.6% to $1,059.05 in early Thursday trading.
Yet the longer-term investment picture is less uniformly bearish. World Gold Council data show physically backed gold exchange-traded funds attracted $10 billion in September, taking quarterly inflows to a record $31 billion.
Holdings increased by 67 tonnes to 4,256 tonnes even as gold lost 8.5% that month.
Antonio Di Giacomo of XS.com said higher returns on debt instruments were increasing the relative cost of holding bullion. He nevertheless saw geopolitical uncertainty as a potential source of safe-haven demand.
Gold price: The $4,073 floor comes back into view
With $4,100 breached, traders are watching the October 14 low around $4,073. A sustained break would bring $4,000 into focus, while a recovery above $4,135 could open the way towards $4,150–$4,169.
Kotak Neo commodity researcher Kaynat Chainwala, in an October 21 analysis published by Business Standard , said persistent oil strength could push inflation expectations, Treasury yields and the dollar higher, potentially sending gold towards $4,000.
Conversely, sustained relief in crude and yields could allow a recovery towards $4,300–$4,400.
Neither outcome is assured. The next move depends on whether energy prices keep reinforcing Fed tightening expectations or allow bond yields to ease.
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