Gold Falls Below $4,000 an Ounce for the First Time Since July as the Weekly Slide Deepens

Gold fell below $4,000 an ounce on Friday for the first time since July, extending the sharpest weekly slide the metal has seen in more than four months. Spot gold dipped to a low of $3,986.54 in the Asian session, according to TradingKey, after Reuters had recorded it at $4,018.69 an ounce in early trade, its lowest intraday level since August 3. Reuters put the weekly loss at 3.4 percent, the biggest weekly decline since June, and United States gold futures for December delivery were down 0.6 percent at $4,033.70.

The break followed a hard Thursday. Gold fell 2.83 percent that day to close at $4,024.21, a low of more than two months, after dropping through the $4,100 and $4,066 levels in quick succession, TradingKey reported. Selling then carried into Friday across precious metals and other markets, on a day when Asian share indexes also fell and Brent crude traded near $114 a barrel.

Why a safe haven fell

The usual logic ran in reverse. Gold often rises when investors want safety, but this week's pressure came from interest rates. Brent crude briefly traded above $114 this week, and United States inflation readings, both consumer and producer prices, came in above expectations. That mix fed the view that the Federal Reserve will keep rates higher for longer, which hurts gold because the metal pays no interest. Reuters linked Friday's early move to exactly that: surging oil prices and resilient United States economic data fuelling expectations of a longer hold at high rates.

TradingKey also pointed to a liquidity selloff. On Thursday the 10 year Treasury yield fell back below 5 percent and the dollar index dropped near 101.5, moves that would normally help gold, yet gold still fell, while silver, copper and technology shares were sold at the same time. That pattern suggests some investors were selling their most liquid assets to cut leverage as risk appetite dropped, rather than making a call on gold itself.

What analysts watch next

The break under $4,000 tests a level some banks had treated as a floor. BeInCrypto reported that Morgan Stanley analyst Amy Gower had earlier called $4,000 a floor for the metal. Justin Lin of Global X ETFs told the outlet he sees $3,900 as the next test, described the selloff as liquidity driven, and said expectations of lower rates could support a rebound. Bank of America has flagged a possible low near $3,750, BeInCrypto reported.

The next fixed point is the Federal Reserve meeting on October 27 and 28. TradingKey said markets generally expect the Fed to hold rates this month, while putting the likelihood of another rate increase in December at 86 percent. A hold with a firm tone would keep pressure on gold into November. A softer signal on December would give the metal room to recover, starting with the $4,000 line it lost on Friday.