Gold Falls 3.5% for the Week to $4,016.27 as Oil Rises
Key Facts
Spot gold fell 0.2% to $4,016.27 an ounce by 0351 GMT on Friday and was down 3.5% since the start of the week, its biggest weekly loss since June, according to Reuters. U.S. gold futures for December delivery fell 0.7% to $4,030.40 an ounce in the same report. EL7's daily closing data show gold at 4,039.3 on October 23, compared with 4,060.4 the previous day. Silver also closed at 53.98, versus 55.007 on October 22. These figures put the metals' decline in the context of rising oil prices and interest-rate concerns, while EL7's closing data reflect end-of-day prices rather than the early trading moves tracked by Reuters.
Brent rose 79 cents, or 0.7%, to $113.96 a barrel on Friday, after reaching $114.72, its highest level since May 4, Reuters reported. The benchmark was on track for a weekly gain of about 4%. That followed a 4% rise on Thursday, after prices had been below $97 a barrel at the start of the month, according to The Associated Press. Reuters linked oil's rise to Houthi attacks in Saudi Arabia and fears of further disruption to energy supplies from the Middle East. It added that Aramco ordered its Dhahran headquarters evacuated on Thursday. The comparison between the start-of-month and Friday levels shows how quickly crude rose during a period of growing concern about supply flows.
The risks to navigation in the Strait of Hormuz have affected the regional supply outlook. The Associated Press reported on October 22, citing Iranian television, that 7 tankers were damaged or caught fire overnight from Wednesday to Thursday, but said it could not independently verify the account. The agency said October had seen the highest number of reported attacks on commercial shipping since March, according to a British military monitor. It also cited Lloyd's List Intelligence as recording 28 attacks on ships during October, the highest number since the war began. Despite the risks, some Gulf operators continued moving oil through the strait under U.S. military protection, the agency reported. Aramco CEO Amin Nasser said the capacity of the East-West pipeline, which bypasses the strait, had risen from 2 million barrels to 7 million barrels per day during the energy crisis.
Reuters said rising energy prices bolster expectations that interest rates will stay higher for longer, increasing the opportunity cost of holding non-yielding gold. In the same report, traders were largely expecting rates to remain unchanged at the October meeting, while expectations of a December rate hike stood at 80%. The Federal Reserve's calendar lists the Federal Open Market Committee meeting on October 27 and 28, 2026. The calendar alone does not specify when the decision will be announced on the meeting day. Markets are focused on the upcoming meeting and the interest-rate outlook as energy prices rise alongside gold's decline.
S&P Global's preliminary purchasing managers' indexes for the services and manufacturing sectors are scheduled for release on Friday, October 23, at 9:45 a.m. Eastern time, according to a calendar published by Kiplinger. The release is scheduled for the same day that EL7 data showed gold closing at 4,039.3 and silver at 53.98. The two readings due out will offer an update on U.S. activity ahead of the Fed meeting on October 27 and 28. In energy markets, Brent remains elevated after reaching $114.72 a barrel, amid regional disruption concerns reported by Reuters. For early gold trading, Reuters reported a weekly decline of 3.5% when it recorded the price by 0351 GMT.