Global gold prices weakened again in trading on Tuesday (October 20, 2026), as a surge in crude oil prices fueled concerns over mounting inflationary pressure in the United States (US).
Spot gold fell 0.5% to US$4,120.49 per troy ounce as of 16:09 WIB (Western Indonesian Time), while US gold futures for December delivery declined 0.5% to US$4,139.10 per troy ounce. This downturn comes as investors grow increasingly cautious ahead of the Federal Reserve’s monetary policy meeting on October 27–28, which is expected to provide clues regarding the trajectory of US interest rates through the end of the year.
Pressure on gold has intensified as Brent crude oil prices approached a five-month high, driven by geopolitical tensions in the Middle East. Attacks by the Houthi group on Saudi Arabian energy infrastructure, alongside reports of strikes against vessels in the Gulf region, have heightened the risk of global oil supply disruptions. Such conditions could drive up energy costs and exacerbate inflationary pressures. Ricardo Evangelista, Director and CEO of ActivTrades, noted that persistent inflationary pressure—fueled by high energy costs—could reinforce expectations that the Federal Reserve may need to maintain a tight monetary policy to keep price increases in check.
Market participants currently anticipate that the Fed will hold interest rates steady at its October meeting; however, the primary focus remains on the possibility of a rate hike in December. According to the CME FedWatch Tool, as cited in market reports, the probability of a rate hike in December stands at approximately 90%. These expectations weigh on gold, as higher interest rates enhance the appeal of interest-bearing investment instruments, such as US government bonds. Although gold is traditionally considered a hedge against inflation, rising interest rates and bond yields can diminish investor interest in the precious metal, which does not generate interest income.
In addition to awaiting the Federal Reserve's decision, investors are also closely monitoring the upcoming release of U.S. Personal Consumption Expenditures (PCE) data—a key inflation indicator used by the central bank. Inflation figures that exceed expectations could strengthen expectations for interest rate hikes, placing further pressure on gold. Conversely, signs of easing inflation could pave the way for a recovery in the price of the precious metal. In other metals markets, silver rose 0.2% to US$57.19 per ounce, while platinum fell 0.1% to US$1,639.45, and palladium weakened by 0.9% to US$1,110.06 per ounce.
Conclusion
Gold prices remain under pressure due to growing expectations of Federal Reserve interest rate hikes, fueled by inflation concerns stemming from a surge in global oil prices. Rising oil prices present a dilemma for gold: while geopolitical risks may boost demand for safe-haven assets, the resulting inflationary pressure could prompt the Fed to keep interest rates higher for longer.
In the short term, the US$4,100 level serves as an important psychological threshold to watch. Should the price break below this area, selling pressure could persist. Conversely, if inflation concerns subside and the Federal Reserve signals a softer policy stance, there may be an opportunity for gold to recover toward the US$4,150–4,200 per troy ounce range.