Liquidity-driven selling remains a risk for gold near a three-month low, even as Global X ETFs analyst Justin Lin sees a less aggressive Federal Reserve rate outlook as potential support.
Spot gold was around $4,020 an ounce on Oct. 23. An earlier EconoTimes market update recorded a separate quote of $3,998.35 at 11:20 a.m. ET (15:20 UTC), after a session low of $3,975.23.
Reuters reported a 4% weekly loss in its later Friday update and linked a 2.8% drop on Thursday to higher oil prices and concern that inflation could keep interest rates elevated. 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 weaken its relative appeal.
Lin said expectations for fewer further Fed rate increases could give bullion near-term support. He also said a V-shaped recovery remained possible while the market faced downward pressure.
