Gold slips below $3,900 as oil-driven inflation worries weigh on safe-haven demand

Gold prices dropped below $4,000 an ounce on Friday, reaching $3,880, the lowest level since early October 2025. The decline came amid broader market uncertainty ahead of U.S. employment data and the upcoming midterm elections.

Despite a weaker U.S. dollar and lower bond yields, which normally support the metal, analysts said gold faced strong selling pressure. Philip Streible, chief market strategist at Blue Line Futures, linked the weakness to the ongoing war with Iran, noting that "the rule in the markets is that you are supposed to buy the inflation and oil right now is the inflation." He added that a robust economy gives the Federal Reserve room to keep raising rates, which would continue to pressure gold.

Simon-Peter Massabni, head of business development at XS.com, said gold’s trajectory will depend on whether new economic data prompt a reassessment of the interest-rate outlook. He highlighted three possible developments: a cooling U.S. labor market, a sustained decline in core inflation, and a downward repricing of future rate expectations.

Technical analyst Waleed Said of GivTrade said the market’s path of least resistance remains lower, with support expected near $3,800 an ounce. He noted that the sell-off has pushed gold well below its 200-day moving average, indicating bearish momentum.

Some market participants view the dip as a buying opportunity. Naeem Aslam, chief investment officer at Zaye Capital Markets, and Jeff Sarti, CEO of Morton Wealth, both suggested that the lower prices could present long-term entry points, citing technical factors and a temporary decoupling from bond yields.

Investors will watch a series of U.S. economic releases and the midterm elections for further cues on inflation, interest-rate policy and geopolitical risk, all of which could influence gold’s direction in the coming weeks.