Pro-government says gold’s slide below $4,000 reflects renewed inflation and rate fears

Pro-government says gold’s slide below $4,000 reflects renewed inflation and rate fears
Gold prices fell below $4,000 an ounce, reaching their lowest level since mid-July, as markets reassessed the outlook for inflation and U.S. monetary policy. Spot gold was quoted at $3,998.35 an ounce, down 0.6% on the day, after briefly dropping to $3,975.23.

The decline followed a sharp rise in oil prices after attacks by Yemen’s Houthi movement in Saudi Arabia triggered concerns about fresh disruptions to energy supplies. Brent crude reached its highest level in four years, adding to fears that more expensive fuel could prolong inflationary pressure.

That dynamic has weighed on gold because the metal pays no interest. If higher energy costs push inflation upward, central banks may keep borrowing costs elevated for longer, making yield-bearing assets more attractive to investors. U.S. consumer and producer inflation also rose more than expected, reinforcing those concerns.

Markets broadly expect the Federal Reserve to leave rates unchanged at its October 27–28 meeting. However, the possibility of a rate increase in December has grown, according to the reporting cited by the sources.

The sell-off was compounded by losses in technology shares, which prompted some investors to sell precious metals to raise funds. Silver also declined to $53.97 an ounce, while platinum and palladium ended lower.

Attention now turns to the U.S. personal consumption expenditures price index, due on October 29. The report is expected to offer fresh guidance on whether inflation is moving toward the Fed’s 2% target—and whether pressure on gold will continue.