- Lead. Gold ended the week at $3,995.78 per troy ounce, down 4.1% and below $4,000 for the first time in recent weeks, as rising US inflation expectations weighed on the metal.
- Fact. Brent crude rose 6.5% over the same week to close at $116.78 per barrel — its highest since March and a fourth consecutive weekly gain — driven by renewed attacks on Saudi energy infrastructure and ongoing Gulf shipping disruptions.
- Stake. The divergence between falling gold and surging oil reflects a market recalibrating between monetary risk (inflation expectations up, gold down) and supply risk (oil up on the Gulf conflict), with the S&P 500 down 1.21% and the Nasdaq off 2.60% on the week.
The University of Michigan’s October consumer sentiment survey, released Friday, showed one-year inflation expectations climbing to 4.7% from 4.6%, and long-run expectations rising to 3.5% from 3.4%. Those readings pushed real yields higher and dragged gold lower, even as the metal has historically served as an inflation hedge. The dynamic reflects a growing view that inflation, if sustained, may force further rate increases — a scenario that raises the opportunity cost of holding non-yielding gold.
Oil’s Fourth Consecutive Weekly Gain
For oil, the story remained one of supply. The drone strike on Saudi Aramco’s Shaybah field that pushed Brent to $111 triggered downstream anxiety about the resilience of Gulf export infrastructure; Brent has since added another $5.78 per barrel, a 5.2% premium on top of the earlier strike-driven spike.
The US Department of Energy authorized an emergency release of up to 400,000 barrels from the Strategic Petroleum Reserve to cover disrupted deliveries to Phillips 66’s Lake Charles refinery — a targeted intervention that underscores how directly Gulf supply disruptions are flowing through to US refining capacity. The Brent-WTI spread widened markedly over the week, from $7.79 to $13.33, reflecting the premium being placed on seaborne crude with Atlantic routing.
Silver, Copper, and Lithium Extend Losses
Gold was not alone in its decline. Silver fell 5.4% over the week to $53.91 per ounce, copper slipped 0.8% to $6.4683 per pound, and lithium carbonate in China dropped 5.0% to CNY97,000 per tonne — its eighth consecutive weekly decline and more than 50% below its May peak of CNY200,500. Natural gas in the US fell 15.3% on a large storage build. The broad commodity pullback, outside of oil, reflects softer industrial demand expectations colliding with a stronger dollar, which the week’s risk-off equity moves reinforced.
Markets face the Federal Reserve’s October 28 policy decision with odds still strongly favouring a hold at 4.00%, but the trajectory of inflation expectations, now rising for a second consecutive month, will determine whether that consensus holds into December.