Gold slipped below $4,070 Thursday as oil climbed and investors weighed the prospect of higher interest rates, with Reuters later reporting bullion at its lowest level since Aug. 3.
At 2:05 p.m. EDT (18:05 UTC) on Oct. 22, Reuters put spot gold down 2.4% at $4,041.39 an ounce. December U.S. gold futures settled 2.2% lower at $4,060.40 per ounce.
Brent crude futures were up 3.2% at $112.33 per barrel at 1:05 p.m. EDT (17:05 UTC), while West Texas Intermediate had gained 2.2% to $99.29, Reuters reported. The outlet linked oil’s advance to attacks in Saudi Arabia and concern about further supply disruptions.
Saudi Arabia’s Ministry of Energy said air defenses intercepted a drone aimed at a processing facility at Saudi Aramco’s Shaybah oil field on Oct. 21. Falling debris started a fire in a contractor’s vehicle outside the facility, killing two residents and injuring two others, the ministry said. It said operations were unaffected and did not identify who launched the drone.
Reuters said sustained oil gains can add to inflation expectations and the prospect of higher interest rates, which can weigh on gold because bullion pays no interest. Kelvin Wong, senior market analyst at OANDA, told Reuters that a prolonged rise in crude could make the outlook for gold more challenging over time.
U.S. commercial crude inventories, excluding the Strategic Petroleum Reserve, fell by 3.1 million barrels to 412.5 million barrels in the week ended Oct. 16, the U.S. Energy Information Administration (EIA) said. Earlier Thursday, FXStreet quoted XAU/USD at $4,085.58 at 6:02 a.m. EDT (10:02 UTC) and identified $4,070 as support in its AI-assisted technical analysis.
EconoTimes previously covered a downside scenario FXStreet attributed to Societe Generale analysts.
The Federal Open Market Committee (FOMC) is scheduled to meet Oct. 27-28. The Bureau of Economic Analysis (BEA) is scheduled to release its September Personal Consumption Expenditures price index on Thursday, Oct. 29.
