Precious Metal

Gold Near One-Week Low as Oil Rally Keeps Fed Hike Bets Alive

Spot gold traded near $4,127-$4,137 an ounce on Oct. 21, 2026, after touching its lowest since Oct. 15, as higher oil fed expectations of further Fed hikes.

Oct 21, 2026 - 12:26

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Gold prices held in a narrow range on Wednesday, October 21, 2026, after touching their lowest level in nearly a week, as a rally in crude oil revived inflation concerns and kept traders focused on the prospect of further interest-rate increases from the Federal Reserve.

Where prices stood

Spot gold was at $4,127.53 an ounce after hitting its lowest level since October 15 earlier in the session, while U.S. gold futures for December delivery rose 0.1% to $4,145.70, CNBC reported, citing Reuters. CNBC described the decline as gold's fourth straight session of easing.

In early U.S. trading, Kitco News reported spot gold near $4,136.70, up $12.60, or 0.31%, with some support from lower Treasury yields and defensive demand. December gold futures had settled down 0.06% at $4,140.12 on Tuesday, according to Investing.com.

Other metals

According to CNBC, spot silver slid 0.7% to $57.6 an ounce, platinum fell 0.4% to $1,642.25 and palladium dropped 1% to $1,091.87. Kitco put spot silver near $57.51 in early U.S. trading, down 37 cents, or 0.64%, and said the metal was struggling to hold Tuesday's recovery amid uncertainty about industrial activity.

Rates and the Fed

Gold does not pay interest, which can make it less attractive to hold when rates rise. Nearly all economists surveyed by Reuters expect the Fed to keep rates unchanged at its meeting next week before raising them in December, CNBC reported. Han Tan, chief market analyst at Bybit, said fed funds futures were fully pricing in one more 25-basis-point hike before the end of the year, with two more expected by mid-2027.

Kitco reported that traders assigned roughly an 83% probability to the Fed leaving rates unchanged at its October 27-28 meeting, and roughly a 94% probability that rates would be higher by the December 9 meeting. Kitco also noted that U.S. consumer prices rose 0.6% in September and 3.7% from a year earlier, while producer prices rose 1.3% on the month and 6.3% on the year. The 10-year Treasury yield traded near 5.1% on Wednesday morning, down from recent highs above 5.3%, according to Kitco.

Investors are also awaiting next week's U.S. Personal Consumption Expenditures data, the Fed's preferred inflation gauge, CNBC reported.

Oil and geopolitics

Higher energy costs have been a central factor for the metals market. Brent crude futures held above $110 a barrel during the morning session as tensions in the Middle East raised fears of supply disruptions, CNBC said. Kitco reported that continued attacks on commercial shipping in the Strait of Hormuz supported oil, while Iranian Foreign Minister Abbas Araghchi signaled limited prospects for a near-term agreement with Washington. Kitco said that while Gulf uncertainty supports defensive demand for gold, higher crude prices also reinforce inflation expectations and the case for tighter U.S. monetary policy.

Elsewhere, UK consumer price inflation rose to 3.5% in September from 3.1% in August, according to the Office for National Statistics, a result CNBC said keeps the Bank of England on track to raise rates in November.

Upcoming data

Kitco listed the U.S. calendar for the rest of the week: weekly initial jobless claims on Thursday, followed on Friday by preliminary October manufacturing and services purchasing managers' indexes and the final University of Michigan consumer sentiment reading. The Fed is in its pre-meeting communications blackout, which leaves incoming economic releases and energy-market developments as the main inputs for rate expectations until the October 27-28 meeting concludes, according to Kitco.