Gold Headed For Steep Weekly Loss On Oil-driven Inflation Concerns

(RTTNews) - Gold held steady on Friday but headed for its steepest weekly loss in over four months as a result of rising oil prices and higher-for-longer interest rate expectations.

Spot gold was little changed at $4,023.55 an ounce, after having reached its lowest level since July 20 earlier in the session.

The precious metal has fallen 3.5 percent so far this week, keeping it on track for its worst week since June. U.S. gold futures were down 0.6 percent at $4,037.30.

The U.S. dollar index was subdued as disappointing megacap earnings sparked concerns about the sustainability of AI trade.

The Japanese yen hit its strongest level in more than a month as traders sought safety amid global equity sell-off.

U.S. Treasury yields rose in early European trade due to energy-driven inflation concerns from Middle East tensions.

German government bond yields dropped to nearly two-month lows as investors sought the safety of core European debt amid lingering civil unrest in France.

In economic releases, flash U.S. manufacturing and service PMI readings and the final reading of the University of Michigan's consumer sentiment report will be in the spotlight later today.

Investors also await cues from a slew of central bank meetings, including the U.S. Federal Reserve, the European Central Bank and the Bank of Japan next week for direction.

Despite near-term inflation headwinds, the Fed is widely expected to leave interest rates unchanged at its October 27-28 meeting, although there is a 72.4 percent chance of a quarter point rate hike in December.

Brent crude futures hovered near a five-month high following Houthi strikes on Saudi oil infrastructure and Red Sea ports.

It is feared that the Iran war may escalate and potentially continue for a longer time than anticipated after the U.S. midterm elections on November 3, 2026.