Global gold prices faced sharp downward pressure during trading on Thursday (October 22, 2026), falling to their lowest level in over two months. Spot gold (XAU/USD) plummeted by as much as 2.3%, trading below US$4,050 per troy ounce, amid mounting inflation concerns fueled by a surge in global oil prices. Brent crude oil broke back above US$110 per barrel following a deadly attack on energy facilities in Saudi Arabia, which raised fears of supply disruptions in the Middle East. Tensions escalated further after the United States ordered some embassy personnel and their families to leave Saudi Arabia as a security precaution.
The pressure on gold has intensified as rising energy costs bolster expectations for a hawkish monetary policy from the Federal Reserve. Since the conflict between the United States and Iran erupted in late February, gold has remained under pressure due to high energy-driven inflation and rising borrowing costs. Although gold is traditionally viewed as a hedge against inflation, higher interest rates and rising yields on U.S. government bonds have made the non-interest-bearing precious metal less attractive. Meanwhile, weakness in global stock markets—driven by concerns over the scale of investments in artificial intelligence (AI)—has heightened volatility across financial markets, further weighing on various investment assets.
According to Alex Carrier, a portfolio manager at DNCA Finance, the precious metals market is currently undergoing a phase of "capitulation"—a state where selling pressure intensifies as an increasing number of investors liquidate their positions. He anticipates that volatility in gold is likely to persist, at least until the Federal Reserve’s upcoming meeting on October 27–28. Market participants are now closely monitoring the direction of U.S. interest rate policy, oil price movements, and conditions in the bond market to gauge the future outlook for gold. If the Fed signals that monetary tightening is still necessary to curb inflation, the pressure on gold is likely to persist. Conversely, a softer-than-expected statement could open the door for a price recovery.
Conclusion
The decline of gold below US$4,050 indicates that bearish pressure is intensifying and the market has entered a phase of aggressive selling. Surging oil prices and growing expectations for higher interest rates are the primary factors limiting gold's appeal.