Gold Slides Below $4,000 in Steepest Weekly Drop Since June as Oil Fuels Rate Fears

Gold has suffered its worst week since June, sliding 3.28% over the week and slipping below the psychologically important $4,000-an-ounce level for the first time since mid-July. Silver fared even worse, plunging 7.83% in the same stretch. On Friday, December gold futures on India’s MCX exchange fell 0.81% to Rs 142,150, while silver futures shed 1.75% to Rs 196,100 per kg — a broad retreat that caught many traders by surprise, given how tense the geopolitical backdrop looks.

The trigger was crude, not gold itself. Oil surged to multi-month highs after renewed attacks on Saudi energy infrastructure and shipping routes, and dearer energy feeds straight into headline inflation. That revived the market’s least favourite phrase — higher for longer — as traders reasoned that central banks will have less room to ease while fuel costs climb. Gold pays no yield, so a firmer rate outlook raises the opportunity cost of holding it, and the metal sold off accordingly. Silver’s steeper fall had an extra accelerant: weakness in US technology stocks, particularly AI-linked names, triggered margin calls that forced some investors to liquidate precious-metal positions to raise cash.

The paradox is worth pausing on. Gold is the classic shelter in a crisis, yet it fell in a week dominated by Middle East supply fears and a selloff in risk assets. That tells you which story is running the market right now: inflation and interest rates are outweighing the safe-haven bid. It is also a reminder that gold’s spectacular run earlier in the year left it vulnerable to profit-taking the moment its narrative wobbled. Technical watchers now put immediate resistance for Comex gold at $4,070–$4,100 and support at $3,970–$4,000 — in other words, the metal must win back the very level it just lost to convince buyers the damage is done.

Not every corner of the market is selling. Lower prices encouraged physical gold buying in India during the Dussehra festival, a seasonal cushion that often steadies prices in October, though jewellery demand in China stayed subdued. The Indian rupee, meanwhile, surrendered its early-week gains as dearer oil and renewed dollar demand weighed on it — a reminder that an oil shock reaches household budgets and import bills, not just trading screens.

What to watch next: the Federal Reserve’s October 27–28 meeting, where rates are widely expected to stay unchanged, and the September PCE inflation report plus third-quarter GDP data on October 29, which will shape December hike odds — traders currently put them near 78%. Big tech earnings from Alphabet and Microsoft on October 28 and Amazon on October 29 will test whether the AI selloff that forced precious-metal liquidations has run its course. If inflation data cools and oil eases, gold has a clear path back above $4,000; if energy stays hot, the pressure continues. Readers tracking these cross-currents can follow the macro picture in our forex section, and the forex tools page has calculators for sizing positions around volatile weeks like this one. (Not financial advice.)