Spot gold settled near $3,995.81 an ounce, marking a weekly decline of over 3.5%, while spot silver dropped to $53.89. The precious metals market remains caught in a tug-of-war: while geopolitical instability typically drives demand for safe-haven assets, high oil prices are cementing expectations for higher interest rates, which weigh heavily on non-yielding bullion. Inflation expectations for the year ahead rose to 4.7% in the latest University of Michigan consumer sentiment survey, signaling that energy price pressures are becoming deeply embedded in the economy.

Market participants are now bracing for the upcoming Federal Open Market Committee meeting on October 27-28 and subsequent personal consumption expenditures data. Strong manufacturing and services PMI readings suggest the U.S. economy is absorbing borrowing costs, leaving little room for the Fed to pivot. Meanwhile, the crisis in the Middle East continues to intensify, with October recording 28 maritime incidents, the highest frequency since the conflict began. As Brent crude tests four-year highs, the resulting geopolitical premium is currently failing to ignite a traditional gold rally, leaving investors focused on the looming threat of further monetary restriction.