FX.co ★ Gold Falls to Over Two-Month Low

Gold fell to about $4,080 an ounce on Thursday, its lowest level since early August, as climbing oil prices intensified inflation worries ahead of next week’s Federal Reserve policy meeting. Brent crude rose to its highest level since May after renewed Houthi attacks in Saudi Arabia stoked fears of a broader regional escalation and further supply disruptions.

In the US, both consumer and producer inflation readings came in hotter than expected, while a decline in weekly jobless claims underscored ongoing labor market strength. Together, these factors reinforced expectations for a tighter policy stance. Although the Fed is widely anticipated to keep interest rates unchanged at its October 27–28 meeting, Goldman Sachs is projecting a further 25-basis-point hike in December.

Market pricing reflects similar expectations: traders are assigning an over 85% probability to a December rate increase, according to the CME FedWatch Tool. Investors now turn their attention to next week’s PCE price index—the Fed’s preferred inflation gauge—for additional signals on the future policy path.