Gold heads for sharpest weekly decline in four months on Fed rate outlook

[BENGALURU] Gold prices eased on Friday (Oct 23) and were set for their sharpest weekly decline in more than four months as surging oil prices and resilient US economic data fuelled expectations that the US Federal Reserve would keep interest rates higher for longer

Spot gold was down 0.1 per cent at US$4,018.69 per ounce by 0036 GMT, touching its lowest level since Aug 3. The metal fell 3.4 per cent for the week so far, recording its biggest weekly decline since June.

US gold futures for December delivery dropped 0.6 per cent to US$4,033.70.

Oil prices rose about 4 per cent to a five-month high on Thursday after Houthi attacks in Saudi Arabia stoked concerns of further disruption to energy supplies.

Elevated energy prices bolster expectations of higher-for-longer interest rates by the Fed, increasing the opportunity cost of holding non-yielding bullion.

The number of Americans filing new claims for unemployment benefits dropped to near 57-year lows last week, suggesting a modest pickup in job growth in October.

Focus has turned to the Fed’s Oct 27 to 28 policy meeting and next week’s Personal Consumption Expenditures data, a key gauge closely watched by the central bank as it targets a 2 per cent inflation rate.

Traders are pricing in as low as a 7 per cent chance of an interest rate hike next week, but expectations for a hike in December remain at 81 per cent.

India has issued permits to import around 6,500 metric tonnes of silver over the next six months as the world’s biggest consumer of the precious metal seeks to meet festive-season demand, four bullion dealers who received the permits told Reuters.

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HSBC cut its average 2026 platinum and palladium price forecasts in a research note on Thursday, citing shifting market fundamentals and investor liquidation, while adding that both metals have room to recover.

Among other metals, spot silver edged 0.1 per cent lower to US$54.46 per ounce, platinum slid 0.4 per cent to US$1,563.67 and palladium dropped 0.5 per cent to US$1,051.00. All three metals headed for weekly declines. REUTERS