Gold Prices Fall Sharply as Energy Costs and Inflation Fears Mount

Key summary

New York gold futures closed lower on Friday, October 23, 2026, hitting a three-month low and recording their steepest weekly decline in over four months. The drop was driven by rising energy prices fueling inflation concerns, which increased pressure on the US Federal Reserve to maintain tight monetary policy, including potential rate hikes later in the year. COMEX December delivery gold contracts fell 52.50 dollars (1.29%) to close at $4,007.90 per ounce. Global oil prices, particularly Brent crude, surged to a five-month high after Houthi attacks in Saudi Arabia raised fears of supply disruptions from the Middle East. Analysts noted that higher energy costs could reignite inflation pressure, limiting the Fed's ability to ease policy quickly. Additionally, declines in US technology stocks triggered margin calls for some investors, forcing asset sales including gold to meet liquidity needs. The S&P 500 and Nasdaq indices also fell to five-week lows amid selling related to artificial intelligence (AI) due to concerns over investment costs and infrastructure return trends. Investors expect the Fed to hold rates at its October 27-28 meeting, though there is a 78% assessed probability of a rate hike in December based on CME FedWatch data. The upcoming US Personal Consumption Expenditures (PCE) index release on October 29 will be closely watched as a key inflation metric for the Fed.