Today's Gold Prices: The Yellow Metal Falls More Than 1.5% Amid Rising Oil Prices and Inflation Fears

Gold prices fell by more than 1.5% during Thursday’s trading session, affected by rising crude oil prices and growing concerns about persistent inflationary pressures, which reinforced expectations that U.S. interest rates will remain high for a longer period. 

Meanwhile, investors are awaiting next week’s U.S. Federal Reserve meeting, looking for new signals regarding the future of monetary policy and the direction of interest rates in the coming period.

Today’s Gold Prices on Global Markets

The price of gold in spot trading fell by approximately 1.7% to near $4,070 per ounce, hitting its lowest level since October 14.

U.S. gold futures for December delivery also declined amid pressure stemming from rising energy prices and growing expectations that the hawkish monetary policy will continue.

This decline comes as gold prices remain sensitive to expectations regarding U.S. interest rates, since higher interest rates increase the opportunity cost of holding gold which does not generate periodic returns thereby potentially reducing its appeal relative to yield-bearing assets.

Rising Oil Prices Fuel Inflation Fears and Weigh on Gold

The rise in crude oil prices has added to the pressure on gold, amid growing concerns that higher energy costs will keep inflation at elevated levels, which could prompt central banks to delay easing monetary policy.

Oil prices rose during Thursday’s trading following attacks by the Houthis in Saudi Arabia, prompting the United States to order some of its diplomats and their family members to leave their diplomatic missions in the kingdom.

Investors are monitoring geopolitical developments and their potential impact on global energy supplies, as persistently high oil prices could increase inflationary pressures and limit the Federal Reserve’s ability to cut interest rates.

Expectations of persistently high interest rates typically put downward pressure on gold prices, given the higher yields on competing assets, as well as the potential for the U.S. dollar and Treasury yields to strengthen.

U.S. Interest Rate Forecasts and Their Impact on Gold

Although persistent inflation driven primarily by rising energy prices—strengthens the case for a tighter monetary policy, Fed policymakers are expected to remain cautious for now.

According to the Chicago Mercantile Exchange’s FedWatch tool:

- October 27–28 meeting: The probability of a rate hike does not exceed 15%.

- December meeting: The probability of a hike rises to 91%.

Markets are also awaiting next week’s Personal Consumption Expenditures (PCE) data, one of the key indicators the central bank monitors in its quest to reach its 2% inflation target.

These expectations reflect growing concerns about persistent inflation; however, the path of interest rates will remain tied to upcoming economic data and the Federal Reserve’s assessment of inflation and economic growth risks.

As for the gold market, any signs of continued tight monetary policy could limit the chances of a recovery, while a decline in expectations for interest rate hikes or a drop in bond yields could provide support for prices.

Technical Analysis of Gold: $4,120 Represents Key Resistance

From a technical perspective, gold prices are trading near the $4,090 per ounce level, while the yellow metal faces resistance at $4,120.

A break above this resistance level and a sustained move above it could boost the chances of prices rising toward the $4,150 level, and then to $4,200 per ounce.

Conversely, if prices break below the $4,065 level and close below it on a daily candle, this could keep selling pressure in place, especially if oil prices continue to rise and expectations that U.S. interest rates will remain at high levels are reinforced. in which case we expect gold prices to reach around $4,000 per ounce.

Furthermore, the direction of gold prices in the coming period may depend on a number of key factors, foremost among them developments in oil prices, the trajectory of U.S. inflation, and expectations regarding the Federal Reserve’s interest rate decisions.