Gold Slips below $4,000 for First Time since July

By Staff, Agencies

Spot gold briefly fell below $4,000 an ounce on Friday for the first time since July, deepening a slide that has erased about 28% of its value since the January record, market data showed.

The metal steadied near $4,016 after the dip and is headed for its steepest weekly loss in more than four months, Reuters reported. It fell 2.8% on Thursday.

Gold hit a record $5,594.82 on January 29 earlier this year and has been under pressure since. It lost 11.7% in June alone, State Street Global Advisors reported, rebounded in August, then slid through October.

Friday’s drop took it to its lowest close since July 20.

The Federal Reserve raised interest rates by a quarter point on September 16 to a range of 3.75% to 4%, its first increase since July 2023. Traders see about an 80% chance of another hike in December, Reuters reported. The 10-year Treasury yield also reached 5.34% on October 1, its highest since 2002, Bloomberg reported. Gold pays no interest, so higher rates make bonds more attractive.

Brent crude rose to about $113 a barrel on Friday, its highest since early May, according to Reuters. Prices climbed after Yemeni Armed Forces defensive strikes on Saudi Arabia, including the Red Sea port of Yanbu, an oil field and an airport, and after reports of possible new US attacks on Iran. Higher oil prices raise inflation, which gives the Fed more reason to keep rates high.

Gold also fell on Thursday while Treasury yields and the dollar declined, which would normally support it. Some analysts attributed the drop to a “liquidity-driven selloff”, saying investors sold gold to raise cash as stocks fell.

Bank of America expects gold to average $4,000 in the fourth quarter, with a risk of falling toward $3,750, and to average about $4,813 in 2027, according to its October report.

Goldman Sachs lowered its end-2026 forecast to $4,650 and kept $5,400 for the end of 2027. UBS set a target of $5,400 by September 2027 in August, and Metals Focus forecasts a $5,330 average for 2027.