Gold breaks below USD 4,000 as inflation fears override safe-haven bid
Gold's safe-haven status failed to protect it as oil-driven inflation fears and the Fed meeting drove a global sell-off.
What happened1/5 Gold broke below USD 4,000 on Friday, 23 October
Gold touched its weakest level since mid-July on Friday, 23 October, slipping below the USD 4,000 mark.
The metal lost nearly 3% on Thursday alone as rising oil prices fed inflation fears. ING analysts noted gold "failed to benefit from yesterday's equity sell-off and the significant fall in US Treasury yields."
The usual safe-haven bid that lifts gold during market stress did not kick in this week.
The real numbers2/5 The numbers behind the sell-off
below USD 4,000gold's weakest since mid-Julynearly 3%daily loss on Thursdaybelow 5%US 10-year Treasury yieldThe US 10-year Treasury yield fell below 5% for the first time in a month on Thursday. Normally that lifts gold. This time the market ignored the signal and focused on oil instead.
The S&P Global Composite PMI came in at 57.6 in October's flash estimate, keeping the dollar firm and capping any rebound in gold prices into the weekend.
- 01/02
below USD 4,000 gold's weakest since mid-July The numbers behind the sell-off gold's weakest since mid-July
Why it matters3/5 Why the safe-haven bid failed this time
Gold usually rises when stocks fall and bond yields drop. The inverse correlation with US Treasury yields is one of its most reliable patterns.
This week the 10-year yield fell below 5% and equities sold off, yet gold still lost ground. ING analysts said the market is "more focused on higher Oil prices and what it could mean for inflation — and ultimately central bank policy."
The trigger: an oil tanker caught fire and exploded after striking a naval mine in the southern Strait of Hormuz, according to Iran's IRGC. Oil prices pushed higher, and the inflation narrative took over from the safe-haven story.
How it affects your wallet4/5 What this means for your ringgit
If you hold physical gold bars or a gold-linked ETF, the price moved. The USD 4,000 level is a reference point, not a buy or sell signal.
For Malaysian borrowers, the OPR is set by Bank Negara, not the US Federal Reserve. BNM kept the OPR at 2.75% on 3 September 2026, its seventh consecutive hold. A Fed decision this week does not automatically change your home loan rate.
If you are not holding gold, this is a global market move. Your salary, EPF and LHDN obligations are unaffected by a gold price swing.
- 02/02
nearly 3% daily loss on Thursday The numbers behind the sell-off daily loss on Thursday
What to watch5/5 Fed decision lands Wednesday, 28 October
The Federal Reserve announces its rate decision late Wednesday, 28 October. No high-impact US data is scheduled before then, so gold is likely to stay range-bound until the statement drops.
The CME FedWatch Tool shows less than a 10% chance of a 25-basis-point hike. A hold is the base case.
If the policy statement reveals that multiple policymakers voted for a hike, gold could face further pressure. A unanimous hold would likely see a small bounce before Fed Chair Kevin Warsh's press conference.
Questions people ask
Does this gold price drop affect Malaysian gold prices?
Global gold is quoted in USD. Local gold prices in Malaysia track the global spot price plus the ringgit exchange rate and local dealer margins. A drop below USD 4,000 will show up in local per-gram prices, but the timing depends on the RM/USD rate and dealer stock.
Should I buy gold now that it is cheaper?
No one can tell you to buy or sell. Gold can keep falling if the Fed signals a hawkish stance. If you already hold gold, this is not a reason to panic-sell either. Check your own cash-flow needs before any move, and talk to a licensed adviser if you are unsure.
Will the Fed rate decision change my Malaysian loan rate?
No. Your home loan rate is tied to Bank Negara's OPR, not the US Federal Reserve. Most car loans are fixed-rate hire-purchase and don't move with OPR at all. BNM set the OPR at 2.75% on 3 September 2026. Only a BNM policy change moves your floating-rate loan.
Source: Financial TimesThe StarFXStreet
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