Spot gold dropped below $4,000 an ounce on Friday, October 23, 2026, the first time the metal has traded under that level since July. It ended the week near $3,995, having started it above $4,100, leaving a weekly loss of close to 4%. That is the steepest weekly decline in more than four months and the second losing week in a row.
Oil puts inflation back in focus
The main pressure came from energy. Brent crude jumped on Thursday and Friday to its highest levels since late April after the Houthi movement claimed a new wave of attacks on sites inside Saudi Arabia, while reports emerged of US and Israeli plans for renewed strikes on Iran. A sharp rise in oil feeds directly into inflation expectations, and that pushes markets to expect a tougher stance from the Federal Reserve.
The Fed in the spotlight
The Fed raised rates in September to a range of 3.75% to 4.00% and meets again on October 27 and 28. Markets broadly expect a hold at that meeting, but the odds of another increase in December remain high. Gold pays no interest, so it tends to lose appeal when the expected return on bonds and deposits rises.
An unusual pattern
What stood out this week is that gold fell even during a rush into safe assets. On Thursday, October 22, the Nasdaq dropped about 2.6% on worries about heavy spending on artificial intelligence, and the 10-year US Treasury yield fell below 5% in one of its biggest one-day declines in years. Analysts at Germany’s Berenberg noted it was the first time since December 2008 that gold had fallen alongside such a steep drop in Treasury yields.
Some analysts point to forced selling for liquidity. When stocks fall hard, some investors sell assets that are profitable or easy to sell, such as gold, to meet margin calls.
The bigger picture
Gold is now more than a quarter below its record high of around $5,590, set in late January 2026. Analysts see $4,000 as an important psychological and technical test, and a sustained close beneath it could encourage further outflows from gold-backed exchange-traded funds.
- Main driver: higher oil prices and the inflation risk they carry.
- Policy factor: expectations that the Fed will stay on a tightening path.
- Liquidity factor: gold sold to cover losses in equity markets.
A reminder: trading gold and gold-linked contracts carries a high level of risk, especially during the sharp swings that often surround central bank decisions and geopolitical events. Decide how much you are willing to risk before you trade, and never use money you cannot afford to lose.
Why it matters
Oil prices climbed to their highest since April, reviving inflation worries and strengthening expectations that the Federal Reserve will keep raising rates. Higher expected returns on interest-bearing assets reduce the appeal of gold, which pays no yield.
Market reaction
Gold broke below $4,000 on Friday and finished the week near $3,995, down close to 4%. It also fell despite lower Treasury yields and a tech-stock sell-off, a combination analysts said had not been seen since 2008.
MIZANOVA view
Next week brings the Fed decision on October 28 and further developments in the Gulf. Gold is likely to stay sensitive to any shift in rate expectations and oil prices, so managing risk matters more than trying to call the direction.