Gold drops below $4,000 as rate hike bets rise
Fell below $4,000 per ounce last Friday to its lowest level since mid-July. Unwound safe-haven gains following a record peak of $5,608 per ounce in January 2026.
Gold fell below the key $4,000 per ounce threshold last Friday, touching its lowest level since mid-July. According to data from Trading Economics, the drop represents a major technical break for the precious metal.
The decline follows a record high of $5,608 per ounce recorded in January 2026. Trading Economics attributed the sharp pullback to rising oil prices, which have reinforced market expectations for further interest rate hikes.
Investors are closely monitoring monetary policy ahead of the Federal Open Market Committee meeting on October 28. Futures markets currently price in an 80% probability of a rate hike in December, while the U.S. 10-year Treasury yield trades near 5.0%.
The Federal Reserve maintained its target funds rate between 3.75% and 4.00% following its last adjustment in September 2026. However, persistent inflation pressures and elevated energy costs have heightened market caution surrounding borrowing costs.
Trading Economics published a forecast projecting gold prices to settle at $3,922 per ounce in the fourth quarter of 2026. Market participants view the drop below $4,000 as a signal that peak inflation trades are unwinding.
What do these terms mean?
Technical break: A price movement where an asset crosses a major support or resistance level on a price chart, indicating a potential continuation of the movement.
Federal Open Market Committee: The policy-making body of the U.S. Federal Reserve responsible for setting key interest rates and monetary policy.
Treasury yield: The effective annual interest rate earned by investors holding debt instruments issued by the U.S. government.
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