Gold this week: price breaks below $4,000 as oil lifts rate fears

Key points

• Gold lost 4.1% in the week to Friday 23 October and closed near $3,997, its first close under $4,000 since mid-July
• Attacks on Saudi oil sites pushed Brent to a six-month high near $116, and traders priced an 83% chance of a December Fed hike
• The Fed decides on Wednesday 28 October, with a hold expected and the tone of the statement the real test
• Thursday 29 October brings the ECB decision, US third-quarter GDP and September PCE inflation on the same day

The gold price this week fell 4.1% to close Friday 23 October at about $3,997 an ounce, its lowest close since 17 July. An oil rally driven by attacks on Saudi energy sites fed bets on more Federal Reserve rate rises. Next week the Fed's decision on Wednesday 28 October is the event that matters most.

Why it matters: Gold has now lost 26% from January's record. If the Fed signals more hikes on Wednesday, the $4,000 line that UBS sees as a floor gets a real test, and buyers in rupees and dirhams pay less again.

Last week in numbers

The week took gold below a level that had held all month. On our price data, the 4.1% weekly fall was worse than 96% of weekly stretches since 1968.

At the latest exchange rates, Friday's close works out as follows.

What moved gold last week

The week started quietly, with small losses on Monday and Tuesday and a rise on Wednesday. Then Thursday took it all away.

Why did an oil shock hurt gold instead of helping it?

Because the market treated it as an inflation story, not a safety story. Houthi forces claimed strikes on Saudi energy sites early in the week, including the Shaybah oilfield, and Brent rose above $111 on Tuesday, the highest since May, Engineering News reported. Saudi authorities did not confirm the claims.

By Friday Brent was near $116, a six-month high. Dearer oil lifts petrol and freight costs, and that pushes up the inflation the Fed is trying to bring down. Thursday's 2.8% fall in gold was larger than 98.5% of trading days since 1968 on our data, and it came as oil jumped.

How far did Fed hike bets move?

Far enough to matter. The Fed raised its target range to 3.75% to 4.00% in September. By Friday, futures gave a 92% chance of a hold at next week's meeting but an 83% chance of another quarter-point rise in December, CNBC reported. Earlier in the week the December odds were closer to 90%.

Gold pays no interest, so each step up in expected rates raises the cost of holding it. Our explainer on why gold falls when rates rise walks through the arithmetic.

Did anyone buy the dip?

Some did, but not enough to hold $4,000 at the close. UBS said in October it expects buyers to step in around $4,000, citing steady inflows into gold funds and central bank demand of 750 to 1,000 tonnes a year. On Friday the dip buyers lost out to forced sellers, as a slide in technology shares triggered margin calls and some investors sold metals to raise cash.

The week ahead

Will Wednesday's Fed decision push gold lower?

A hold is expected: 94 of 100 economists in a Reuters poll cited by Newsquawk see no change on Wednesday 28 October. The risk for gold is the message. A statement or press conference that keeps a December hike firmly on the table would add to Thursday's pressure, while any hint that oil-driven inflation will be looked through would give gold room to recover.

Our data says to watch the day after as much as the day itself. On the six Fed decision days this year, gold moved 1.3% on average on the day and about 2.6% on the following session.

Can Thursday's figures change the rate story?

Thursday 29 October is crowded. US third-quarter GDP and September PCE inflation, the Fed's preferred price gauge, both come out in the New York morning. A hot PCE figure would back the December hike case; a soft one would ease it.

The European Central Bank decides the same day. Seventy of 73 economists in a Reuters poll expect a hold at 2.50%, with a hike in December, after euro area inflation reached 3.8% in September. Our euro gold price piece has the local view. When the ECB last raised rates, on 10 September, gold fell 1.1% that day.

Levels to watch

Gold sits right on its first support. Friday's close of about $3,997 matches the 17 July close near $3,995. Below that, the lowest close of the past year was about $3,950, in late October 2025.

Overhead, the $4,100 to $4,110 area held as a floor through most of October and is now the first test on any bounce. The 50-day average sits near $4,304 and the 200-day near $4,515, both well above the price, so the trend on our data is down on both time frames.

History offers a little comfort for the month ahead: November has been a rising month for gold in 36 of the last 58 years on our data, with an average gain of 0.8%.

What to watch next week

• Tue 27 Oct: the Fed's two-day meeting begins. Oil and any new strike on Gulf energy sites set the mood going in.
• Wed 28 Oct: Fed decision and press conference, plus the Bank of Canada. The key question for gold is whether December hike odds stay above 80%.
• Thu 29 Oct: ECB decision, US third-quarter GDP and September PCE inflation. Three chances in one day to move rate expectations.
• Fri 30 Oct: Bank of Japan decision, euro area third-quarter GDP and the weekly CFTC positioning report. No US, China or India market holidays this week; Dhanteras follows on 6 November.