Key takeaways
- Spot gold fell more than 2% on October 22, 2026, and touched a ten-week low of $4,034 an ounce, according to FXStreet.
- Higher oil prices tied to Middle East shipping attacks are raising inflation fears, which strengthens the case for higher interest rates and hurts non-yielding gold.
- Futures markets put the chance of a Fed hike on October 27-28 at about 16% but see roughly a 90% chance of an increase in December, according to CME FedWatch data cited by CNBC.
- Central banks remain net buyers of gold, which analysts cite as a source of support, but that demand did not stop the latest sell-off.
The gold price fell more than 2% on Thursday, October 22, 2026, as a renewed rise in oil prices strengthened bets that the US Federal Reserve will keep tightening policy. According to FXStreet, spot gold touched a ten-week low of $4,034 an ounce before trading near $4,047. The move is notable because the drivers of the sell-off are Middle East tensions that would ordinarily support bullion.
Gold pays no interest, so it tends to lose appeal when yields and rate expectations rise. This week, investors have favoured yield-bearing US Treasuries over bullion as their preferred refuge.
Why is the gold price falling when Middle East tensions are rising?
The short answer is that the conflict is feeding inflation, and inflation is feeding rate expectations. BusinessToday reported that the sell-off came amid renewed attacks on commercial shipping in the Strait of Hormuz and reports of renewed Houthi attacks on Saudi Arabian infrastructure. It said Brent crude was rising towards $112 a barrel.
Spot gold was down 2.27% at $4,047.39 in that report, and silver was down 4.51% at $55.105. BusinessToday calculated that gold has lost 3.3% in October so far, and silver 10%.
Earlier on Thursday, CNBC reported spot gold down 1.1% at $4,094.90 by 0333 GMT, its lowest since October 14. The loss then deepened during the New York session. The same oil dynamics are covered in Intelligence Report’s analysis of why additional Gulf supply has not lowered Brent prices.
What does the Fed outlook mean for the gold price?
Markets expect the Federal Reserve to hold at its October 27-28 meeting but to raise rates again later. CNBC, citing CME’s FedWatch Tool, said traders saw a 16% chance of a hike next week and a 90% likelihood of an increase in December. Other data providers differ slightly: FXStreet, citing Prime Terminal, put the October odds at 8% and the December odds near 80%.
The gap between a pause and a hike matters for gold. FXStreet noted that even a widely expected hold leaves the policy outlook tilted towards tightening, and that elevated energy costs raise the chance the Fed will need to adjust further. Higher rates raise the opportunity cost of holding a metal that earns nothing.
Other central banks are part of the picture. Mitrade cited tightening signals from the Bank of England and the Bank of Japan as an additional weight on gold earlier this week. Analysts at Mitrade also said the energy shock has pushed inflation above central bank targets across major economies.
Why are Treasuries attracting the haven flows?
FXStreet reported that the US 10-year Treasury yield fell 15 basis points to 4.963%, its lowest since September 23. It linked the move to a safe-haven bid and to mounting concern over the credit risks of technology companies, as investors look for evidence that large AI investments will pay off.
Falling yields would normally help gold. That did not happen on Thursday. FXStreet said high energy prices pushed investors towards yield-bearing Treasuries and away from the non-yielding metal. Gold has often been described as a rival to the dollar and Treasuries as a reserve asset, and this week the rivalry went against bullion.
A basis point is one hundredth of a percentage point. A 15-basis-point drop in the 10-year yield is therefore a sizeable one-day move for the benchmark bond.
Are central banks still buying gold?
Official-sector demand has been a pillar of the market. According to World Gold Council data reported by The Epoch Times on October 21, central banks bought a net 62 tons in July and August. The People’s Bank of China added 20 tons in August, its 22nd consecutive month of purchases, and has bought 80 tons so far this year.
The same report said the National Bank of Poland had bought 98 tons in the first eight months of 2026. It also cited Goldman Sachs as saying robust central bank demand could lift prices in the closing months of the year.
Buying is not uniform. Figures published by the World Gold Council on October 6 and summarised by GoldSilver show net purchases of 39 tonnes in August, with Russia and Jordan among the sellers. Thursday’s drop suggests that official buying has not been enough to offset leveraged and futures-market selling. A daily report from USAGOLD described the move as paper-and-futures selling and not a weakening in coin and bar demand. That reading comes from a precious metals dealer and should be weighed accordingly.
What to watch
- The $4,000 level: FXStreet’s technical analysis names $4,000 as the next target for sellers after the break below $4,100. A close beneath it would extend the October decline.
- Fed meeting, October 27-28: The decision and any guidance on a December increase are the main scheduled event. A hold with hawkish language is already priced in.
- US PCE inflation data: CNBC said markets await next week’s Personal Consumption Expenditures data, the inflation gauge the Fed watches most closely.
- Hormuz shipping and Brent: Further attacks on tankers or Gulf infrastructure would lift oil and, on this week’s pattern, reinforce rate expectations.
- Treasury yields: A sustained fall in the 10-year yield, with haven demand shifting back to bullion, would be the clearest sign that gold’s relationship with yields is normalising.
- Central bank data: The next World Gold Council monthly figures will show whether reserve managers kept buying through the recent price decline.
Frequently asked questions
Why did the gold price fall on October 22, 2026?
Spot gold fell more than 2% as higher oil prices, linked to Middle East shipping attacks, raised inflation fears and reinforced expectations that the Federal Reserve will raise rates again. Investors also favoured US Treasuries, according to FXStreet, CNBC and BusinessToday. Gold pays no interest, so higher rates reduce its appeal.
What is the gold price per ounce now?
On October 22, 2026, spot gold traded around $4,047 an ounce after touching a ten-week low of $4,034, according to FXStreet. Earlier in the day CNBC listed it near $4,084 in the morning New York session. Prices move continuously, so check a live quote for the latest level.
Will the Fed raise interest rates in October 2026?
Markets do not expect it. CNBC, citing CME's FedWatch Tool, said traders saw a 16% chance of a hike at the October 27-28 meeting and a 90% chance of an increase in December. Another provider, Prime Terminal, cited by FXStreet, put October odds at 8% and December near 80%.
Sources
- Gold slides as safe-haven demand shifts to US Treasuries despite lower yields (FXStreet)
- Gold drops over 1% as oil rally reinforces higher-for-longer rate outlook (CNBC)
- Gold falls below $4,100, silver slides 4.5% as Brent nears $112 (BusinessToday)
- Gold flatlines below $4,150 as traders assess Fed rate path amid Middle East risk (FXStreet)
- Gold struggles near $4,150 as global rate hike risks loom (Mitrade)
- Global Central Banks Kept Buying Gold This Summer (The Epoch Times)
- Central Bank Gold Buying: Why 39 Tonnes Matters (GoldSilver)
- Silver Tumbles To $55.94 As Oil's Surge Revives Rate-Hike Bets; Gold Eases To $4,084 (USAGOLD)
Top image: G. Edward Johnson / Wikimedia Commons (CC BY 4.0)
This article was produced by the Intelligence Report Desk. Sources are linked below.
