Gold hits four-month low on Fed hike fears

Gold fell to its lowest level in four months on Friday. Silver dropped below $50 an ounce for the first time since November 2025. Business Recorder, citing Reuters market reporting, said rising crude oil prices and persistent inflation worries reinforced expectations of further US interest rate increases.

Spot gold slid 1.6 percent to $3,956.09 per ounce by 1243 GMT, after earlier touching its lowest since June 30. US gold futures for December delivery fell 1.64 percent to $3,965.30 per ounce. Bullion has declined 4.7 percent so far this month.

Giovanni Staunovo, an analyst at UBS, pointed to two factors. One was US GDP data that came in stronger than expected. The other was the rise in oil prices, which he said is putting pressure on the Federal Reserve to raise interest rates further. Staunovo also offered a longer-term view, saying gold could climb to $5,000 or higher next year if the Fed eventually has to cut rates again and inflation stops being a problem. That is one analyst's opinion and not a certain outcome.

The move came after a week of central bank meetings. According to the report, major central banks paused their rate hikes this week but made clear the tightening cycle is not over. The Fed and the European Central Bank both held rates steady and pointed to inflation risks from surging energy costs. A separate report on the Fed decision said the central bank left its benchmark rate in a 3.75%-4.00% range and described inflation as still elevated. That report gave the next Fed meeting as 8-9 December 2026.

The link between energy prices, interest rates and gold is the core of the story. Gold pays no interest or yield. When investors expect interest rates to stay higher for longer, holding it becomes relatively less attractive compared with assets that pay interest. Business Recorder noted that higher energy prices strengthen expectations of a prolonged period of elevated interest rates, which makes non-yielding assets such as gold less appealing.

Strong US growth data feeds into the same dynamic. A stronger economy can give the Fed more room to keep policy tight, and an oil-driven rise in inflation can add to that pressure. In this case, the report said both factors combined to weigh on bullion and on silver.

The selloff also fits a wider pattern of softer sentiment around the metal. Earlier in the week, Reuters reported that analysts it surveyed had trimmed their 2026 gold price forecasts for a second consecutive quarter. They cited elevated US yields, a firm dollar and the prospect of rates staying higher for longer. According to a secondary report on that survey, the mean estimate for the 2026 average price slipped to $4,495 per troy ounce from $4,509 three months earlier. Some market commentary also noted that Chinese demand and large exchange-traded fund holdings were providing some support, although that did not prevent the decline.

For currency and metals traders, the main things to watch are upcoming US inflation readings, energy price trends and further signals from the Fed and the ECB on whether the tightening cycle will continue. Changes in expectations can move prices well before policymakers act, and the direction of those expectations can change quickly when new data arrives. This article is a news summary for information only. It is not investment advice, and it does not predict future price movements.

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This is a news summary for general information only — not financial advice, and nothing here is a recommendation to buy or sell any currency or metal. Exchange rates and gold prices can move sharply around data releases and central-bank decisions, and trading them carries a real risk of loss, which leverage magnifies. Always verify against the original source and do your own research before making a financial decision.