Spot gold fell to a three-month low on Thursday as Brent crude jumped and a risk-off mood hit Wall Street. Traders now look to the Fed's October rate decision and next week's AI hyperscaler earnings.
Spot gold dropped 2.8% to settle at $4,024.55/oz, its lowest level since July 20. Gold futures dipped 0.5% to settle at $4,039.90/oz.
The global oil benchmark surged and stoked worries over an energy-driven inflationary shock. A risk-off mood also led traders to shun bullion and the dollar for the safety of U.S. Treasuries.
Houthi attacks lift Brent
Brent crude futures added 3.7% to settle at $112.89 a barrel, an over five-month high. The advance followed fresh attacks by Iran-backed Houthis on Saudi Arabian energy infrastructure and airports, which stoked supply disruption fears.
The Houthis said in a statement that they conducted four military operations over the past 48 hours against Saudi targets. Those included the Ministry of Defense building in Riyadh, a Saudi Aramco site in Yanbu and two separate airports. Reuters reported that Saudi Aramco had told staff to evacuate its headquarters in Dhahran.
Gold slips below $4,100 support
Gold has declined this week despite an easing in the greenback, as elevated oil prices kept a lid on sentiment. David Morrison, senior market analyst at Trade Nation, said gold broke below intermediate support around $4,100 for the third time this month. Earlier dips were short-lived and bought into, but according to Morrison: "hope is not a strategy."
He added that the daily MACD readings on gold and silver have yet to pull back to oversold levels from which sharp, sustainable rallies can develop.
Fed and AI earnings in focus
Peter Schiff of Euro Pacific Asset Management said gold already corrected and that a stock market crash would be bullish. The week's U.S. economic calendar is light and the Fed is in a blackout period, which leaves oil, bonds and Wall Street as the main catalysts.
The focus is now on quarterly reports from other AI hyperscalers next week and to the Fed's October rate decision. The Federal Open Market Committee is widely anticipated to hold rates steady, with eyes on Chair Kevin Warsh's press conference.
Source: Investing.com
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