Gold traded around $4,000 an ounce Friday after dipping below the threshold, as a steep weekly decline kept oil-driven inflation concerns and the U.S. interest-rate outlook in focus.
Reuters reported spot gold at $4,023.95 per ounce at 8:10 a.m. EDT (12:10 UTC), after an earlier session low of $3,986.50. Reuters put the weekly decline at 3.5% in that update. EconoTimes earlier covered gold’s rebound above $4,000 Friday.
At 11:20 a.m. EDT (15:20 UTC), Reuters quoted gold at $3,998.35, down 0.6% on the day, after a session low of $3,975.23. That later update put the weekly loss at 4%. FXStreet subsequently reported a price near $4,002 at 12:16 p.m. EDT (16:16 UTC), below the day’s $4,034 intraday high. The reports capture separate price snapshots as bullion moved around the $4,000 mark.
The decline followed a sharp drop Thursday. Reuters reported spot gold fell 2.8% that day, to $4,024.55 an ounce. Reuters linked the pressure to higher oil prices and concern that inflation could keep interest rates elevated.
The U.S. Bureau of Labor Statistics said its Consumer Price Index rose 3.7% over the 12 months through September, while its producer price index for final demand increased 6.3%. Hamad Hussain, a climate and commodities economist at Capital Economics, told Reuters that higher oil prices could keep real interest rates elevated for longer. Because gold pays no interest, higher real rates can reduce its relative appeal.
Jim Wyckoff, a market analyst at American Gold Exchange, offered another explanation for selling. Reuters quoted Wyckoff suggesting that technology stock losses may have prompted margin calls, leading some investors to sell precious metals to meet obligations tied to their equity positions.
The Federal Reserve raised its target range by 0.25 percentage point in September, to 3.75%-4%. Its next meeting is scheduled for Oct. 27-28. The Bureau of Economic Analysis is scheduled to release September Personal Income and Outlays data at 8:30 a.m. EDT on Oct. 29.
