Gold Falls 1.6% to $3,956.09 as U.S. Inflation and Oil Rise
Key Facts
Spot gold fell 1.6% to $3,956.09 an ounce at 12:43 GMT on October 30, after hitting its lowest level since June 30, according to Reuters. U.S. gold futures for December delivery fell 1.64% to $3,965.30 an ounce. Gold was down 4.7% since the start of October, as strong U.S. data and energy risks prompted investors to reassess the interest-rate outlook. UBS analyst Giovanni Staunovo said the price was being affected by strong U.S. gross domestic product data and rising oil prices. He added that rising crude prices "are pressuring the Fed to raise interest rates further."
Data from the Bureau of Economic Analysis showed the personal consumption expenditures price index, the measure tracked by the Federal Reserve, rose 0.5% in September from the previous month, while the core index, excluding food and energy, increased 0.3%. Year over year, the headline index rose 3.6% and the core index 3.1%. These readings keep price pressures in focus for the central bank, particularly as energy costs rise. The U.S. consumer price index also rose 0.6% in September, after 0.4% in August, and recorded a 3.7% annual increase. The gasoline index climbed 9.1% during the month, contributing more than half of the monthly increase in the price index, according to the Bureau of Labor Statistics.
U.S. real gross domestic product grew at an annual rate of 3.4% in the third quarter, compared with 2.2% in the second quarter, according to the Bureau of Economic Analysis' advance estimate. The bureau attributed the increase to higher investment, consumer spending and government spending, factors partly offset by a decline in exports, while imports rose. Strong economic activity, alongside the inflation figures, gives policymakers room to keep focusing on price risks. On October 28, the Fed kept its target interest-rate range at 3.75% to 4%, in a 10-to-2 vote. Lisa Cook and Beth Hammack voted against keeping the range unchanged, preferring a quarter-percentage-point increase.
The metals' decline coincided with rising oil prices: Brent crude futures for December rose 1.49% to $116.59 a barrel, and West Texas Intermediate gained 1.42% to $103.45, according to Reuters at 07:27 GMT. Both crude benchmarks were on track for a fourth consecutive monthly gain in October. An attack on a tanker in the Strait of Hormuz underscored war-related supply risks after the United Kingdom Maritime Trade Operations center said the vessel was struck by explosive devices attached by a small boat. Responsibility for the attack was not immediately clear. Fed Chair Kevin Warsh said energy prices and related costs had risen again in recent weeks, and that the bank must prevent price increases in some sectors from spreading to the rest of the economy.
The decline extended to silver, which fell 4.53% to $50.01 an ounce after touching $49.94, its lowest level since November 2025. The three metals covered in the Reuters report were on track for weekly and monthly declines at the end of October. By contrast, Staunovo said gold could rise to $5,000 or more next year, based on his expectation that the Fed would eventually return to cutting rates and inflation would cease to be a problem. That remains the analyst's estimate, while energy costs and price indicators continue to shape the backdrop for monetary-policy decisions. Major central banks kept interest rates unchanged during the week, but signaled that inflation risks tied to rising energy costs had not gone away.
Markets are awaiting the U.S. personal income and outlays report for October, scheduled for release on November 25, 2026, at 8:30 a.m. Eastern Time. The report comes ahead of the Federal Open Market Committee meeting on December 8 and 9, when new data will be assessed as part of the inflation and interest-rate outlook. Wall Street investors put the odds of a rate hike at the December meeting at about 85%, according to the CME FedWatch tool as reported by the Associated Press. These estimates keep expectations for tighter policy among the factors gold traders are watching, amid the metal's decline since the start of the month and rising oil prices. The upcoming income and outlays data will provide a more recent reading on prices and activity before the central bank meeting.