Gold falls to two‑month low below $4,050 as oil spikes
Gold price (XAU/USD) falls to the lowest in more than two months near $4,025 during the early Asian session on Friday. The precious metal faces some selling pressure as escalating tensions in the Middle East send oil surging ahead of a Federal Reserve (Fed) policy meeting.
Gold prices plummeted to a two-month low under $4,050 on Friday, amid escalating tensions in the Middle East driving oil prices higher. The precious metal faced selling pressure as concerns grew over potential energy-driven inflation. Yemen’s Houthi group claimed responsibility for an attack on a Saudi Arabian airport and a processing facility, causing oil prices to spike.
The Federal Reserve recently raised interest rates for the first time since 2023, with markets expecting further increases later this year. Fed officials have not yet signaled their stance for the October meeting, but 92.8% of analysts believe no rate change will occur. Historically, higher interest rates tend to weaken gold, which does not yield interest payments.
Societe Generale analysts noted that gold recently hit an interim low near $4,065 and remained within a narrow range of $4,065 to $4,225. Should the latter level fail to be breached, gold could potentially decline further towards the June low of $3,960. Fed Chair Kevin Warsh expressed a moderately cautious outlook, with a speechtracker score of 5.6/10, indicating slightly less conviction than usual.
Amidst the mixed signals, markets still anticipate a hawkish Federal Reserve reaction, with the FXS Sentiment Index remaining at a hawkish 127.51.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
