Gold falls 2.4% to $4,041.39 as oil and interest-rate pressures return
Key Facts
Spot gold fell 2.4% to $4,041.39 an ounce at 18:05 GMT during trading on 22 October 2026, according to a later Reuters update on the session. The agency linked the metal's decline to higher oil prices, which fuelled inflation concerns and reinforced expectations that interest rates would remain high. Explaining the pressure during the session, it said "higher oil prices fuelled inflation concerns". The decline extended to U.S. gold futures for December delivery, which settled 2.2% lower at $4,060.40 an ounce. That settlement followed a 0.2% rise in the same contracts to $4,150 an ounce in the 21 October session, according to Reuters coverage of the previous session. A decline in benchmark U.S. Treasury yields had supported gold then by reducing the opportunity cost of holding the non-yielding metal.
In monetary policy expectations, Reuters cited the FedWatch tool as pricing in a 78% probability of a December rate hike in its 22 October session update. That pricing follows the Federal Reserve's decision at its previous meeting in September to raise its target interest-rate range by a quarter of a percentage point. The decision brought the federal funds rate range to 3.75%–4%, according to the U.S. central bank's statement. The Fed said in that statement that "inflation remains elevated", linking its tightening decision to persistent price pressures. It added that "today's monetary policy action will support a faster return to the Committee's 2% objective", explaining the rationale for raising rates at that meeting.
Gold had ended September with a monthly loss of 8.5%, according to the World Gold Council, before the decline recorded in the current October session. The council linked September's losses to factors including a rise in benchmark U.S. Treasury yields during the month. The yield rose 53 basis points to 5.3%, a move that accompanied the metal's price decline. In investment trading over the same period, net managed-money positions fell by $12 billion. That reduction was equivalent to 84 tonnes of gold, according to the council, with the trimming of positions coinciding with higher Treasury yields and the metal's monthly loss.
In contrast to the reduction in managed-money positions, global gold exchange-traded funds attracted inflows of $10 billion during September, according to the World Gold Council. Those inflows were accompanied by a 67-tonne increase in fund holdings during the same month. Over the third quarter of 2026, inflows into these funds reached a record $31 billion, according to the council's report on holdings and flows. Total gold held by the funds also rose to a record, reaching 4,256 tonnes at the end of September. Assets under management, however, fell 7% month on month to $574 billion because of the metal's price decline. The month thus ended with an increase in the quantity of gold held by the funds, while the value of their assets fell as prices declined, according to the council's explanation.
On U.S. prices, the personal consumption expenditures price index rose 3.4% in August from the same month a year earlier, according to the U.S. Bureau of Economic Analysis. The annual increase in the core index, which excludes food and energy, was 3.0% over the same period. On a monthly basis, the headline index rose 0.3%, according to the bureau's August personal income and outlays release. The core index rose 0.2% from the previous month, also increasing at a slower pace than the headline index on a monthly basis. Both annual readings, headline and core, were above the 2% inflation target to which the Fed reaffirmed its commitment in its September meeting statement.
Attention now turns to the Federal Reserve's Federal Open Market Committee meeting, scheduled for 27 and 28 October, according to the central bank's official calendar. The meeting follows the rate increase the bank approved in September. It will be followed on 29 October 2026 by the next U.S. personal income and outlays release, according to the date announced by the Bureau of Economic Analysis. The forthcoming release covers September, following August data that showed increases in both headline and core price indexes. The report is scheduled for release at 8:30 a.m. U.S. Eastern Daylight Time, putting the income and spending data release after the conclusion of the monetary policy meeting.