Gold had its worst week since June, falling about 4% as oil climbed

Gold slipped below US$4,000 an ounce on Friday and finished the week down about 4%. The metal is now more than a quarter below the record it set in late January.

So why did a safe haven fall during a war scare? Dearer oil makes higher interest rates more likely. Brent had its highest close since April on Friday, and traders now put the chance of a Fed rise in December at about 78%.

Gold pays no interest, so it loses appeal when cash and bonds pay more. ING's analysts said gold seems more focused on what oil means for central banks than on the fighting.

Chart: Gold sinks as dearer oil lifts rate bets. A Nasdaq gold price index at each week's last close, mid-May to 23 Oct 2026, rebased to 2 January. It ended Friday at 77.97, down from 80.22 a week earlier. — This story’s chart of the day.

The sharemarket added to the pressure. Metals analyst Jim Wyckoff said margin calls were forcing equity traders to sell gold and silver. A margin call is a broker's demand for cash when shares bought with borrowed money fall.

Bonds went the other way. The US 10-year Treasury yield fell below 5% on Thursday as investors bought government debt. Falling yields usually help gold, and last week they did not.

Our read

we think gold is trading as a bet on interest rates for now. The Fed decides on Wednesday in Washington, and any hint of a December rise would keep the pressure on.

This story ran in Show Us the Money Monday 26 October’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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