By Olivia Hart

Gold fell 1.6% to $3,956.09 an ounce on Friday, reaching a four-month low as pricier oil and inflation concerns strengthened expectations of additional Federal Reserve rate increases. Spot gold touched its weakest level since June 30, while December U.S. gold futures for delivery fell 1.64% to $3,965.30 an ounce.

What changed the metals market?

U.S. data released Thursday supplied the immediate pressure. The Bureau of Economic Analysis reported that the personal consumption expenditures price index rose 3.6% from a year earlier in September.

The measure gained 0.5% from August after rising 0.3% the previous month. Excluding food and energy, prices rose 0.3% for the month and 3.1% from a year earlier.

Separate data released Thursday showed the U.S. economy expanding faster than economists had forecast over the previous quarter.

• Gold was down 4.7% in October.
• Spot silver shed 4.53% to $50.01 an ounce after touching $49.94, below $50 for the first time since November 2025.
• Platinum fell 3.83% to $1,430.82, while palladium dropped 3.78% to $968.00.
• Silver, platinum and palladium were headed for losses over both the week and the month.

Why did stronger data and dearer oil pressure gold?

UBS analyst Giovanni Staunovo said: “Gold prices are affected by a combination of two factors, the U.S. GDP data, which came in stronger than expected, and the increase in oil prices putting pressure on the Fed to hike further interest rates.” The figures added weight to economist forecasts that the Federal Reserve will raise rates again in December.

The mechanism is direct: higher energy prices can keep inflation elevated, borrowing costs high for longer and demand for assets that pay no yield lower. For gold investors, that rate path now dominates the immediate pricing equation.

How much oil risk has entered prices?

Oil prices rose and were headed for a fourth monthly increase after a tanker was attacked in the Strait of Hormuz. The attack underscored the supply threat posed by the U.S.-Israeli war on Iran.

U.S. crude now sells for more than $100 per barrel, compared with under $70 before the fighting with Iran began. The Consumer Price Index rose 3.7% in September from a year earlier, up from 3.4% in August.

Will the Fed raise rates again in December?

The Federal Reserve held its benchmark rate steady at 3.75% to 4% on Wednesday. Two of 12 voting officials dissented in favor of a quarter-point increase.

The Fed’s post-meeting statement said: “inflation remains elevated.” The central bank raised rates by a quarter point in September, its first increase since July 2023.

Traders had put the odds of a December hike at 78% before Wednesday’s decision. The stronger GDP report, inflation readings and oil increase have added weight to forecasts of another rate rise.

The European Central Bank also held rates steady this week. Both central banks warned that more expensive energy could push inflation higher.

What does the repricing mean for investors?

Firmer growth and dearer energy have reinforced the case for borrowing costs to stay high for longer. That setup reduces the appeal of non-yielding assets, including gold, and keeps pressure on the wider precious-metal complex.

Three inputs will determine whether that pressure persists: the path of U.S. crude above $100, the durability of September’s inflation readings and the Fed’s December decision. Until those signals change, stronger rate expectations remain the central risk for investors holding gold and silver.