Gold Falls Below $4,000 as Iran Tensions Lift Oil Prices

Gold prices fell below $4,000 per ounce on Friday, October 30, 2026, touching $3,965.36 as renewed security concerns around the Strait of Hormuz pushed oil prices higher and persistent US inflation strengthened expectations of additional Federal Reserve interest rate increases.

According to Bloomberg, bullion declined as much as 1.4% during Friday's trading, reaching its lowest level since mid-July. Yahoo Finance reported that gold opened 0.1% higher than Thursday's closing price, although the metal remained under pressure throughout the week.

Gold recorded a weekly decline of 0.2% and a monthly decrease of 4.3%. Compared with the same period last year, however, prices remained 2.3% higher, according to Yahoo Finance.

Thursday's trading had already shown significant weakness. Kitco reported that spot gold traded around $4,024.60 per ounce in late US trading, losing $42, or 1.03%. Silver experienced a steeper decline, falling $1.672, or 3.10%, to approximately $52.180 per ounce.

US economic indicators contributed to the pressure on precious metals. According to Kitco, third-quarter gross domestic product expanded at an annualized rate of 3.4%, exceeding expectations of approximately 3.2% and accelerating from 2.2% in the previous quarter.

Consumer spending increased at an annualized rate of 3.8%. Meanwhile, September's Personal Consumption Expenditures price index rose 0.5% monthly, compared with 0.3% in August, while annual inflation accelerated to 3.6% from 3.4%.

Core PCE inflation, which excludes food and energy, increased 0.3% monthly and reached 3.1% annually. These figures remained above the Federal Reserve's 2% inflation target, reinforcing expectations that monetary policy would remain restrictive.

The Federal Open Market Committee had maintained its benchmark interest rate at 3.75% to 4.00% on Wednesday. The decision passed with a 10-2 vote, with two policymakers supporting an immediate increase of 25 basis points.

Geopolitical developments provided another source of uncertainty. The United Kingdom Maritime Trade Operations reported that a tanker in the Strait of Hormuz was struck by explosive devices attached to a small boat on Friday. Authorities had not immediately identified those responsible.

Saul Kavonic, head of energy research at MST Marquee, linked the maritime incident to concerns about further escalation in the region.

"Continued kinetic action around the Strait of Hormuz amidst doubts of a viable diplomatic pathway are keeping oil prices elevated in expectation of an escalation of the conflict in coming weeks," said Saul Kavonic, head of energy research at MST Marquee.

Brent crude reached $113.49 per barrel at the time of Yahoo Finance's report. Bloomberg also identified the prospect of renewed US military action against Iran following the US midterm elections as a factor influencing market expectations.

Diplomatic efforts had continued despite the security concerns. According to Kitco, US Vice President JD Vance sought to revive negotiations through a letter to Mohsen Rezaei, head of Iran's Supreme National Security Council. Qatari mediators also presented a separate draft proposal aimed at ending the conflict.

However, a senior Iranian official rejected the latest proposal as unacceptable. Disagreements over sanctions, security arrangements, and maritime access through the Strait of Hormuz continued to complicate negotiations.

Investment professionals also offered differing views on the role of gold in long-term portfolios. Robert R. Johnson, a professor at Creighton's Heider College of Business, opposed allocating money to precious metals because of their potential long-term return trade-offs.

"while having a small position in precious metals may dampen portfolio volatility in the short-run, the tradeoff between slightly dampened volatility and the lost long-term return is certainly not a prudent one, particularly for Gen Z/millennials with long investing time horizons," said Robert R. Johnson, professor at Creighton's Heider College of Business.

Brett Elliott, director of content and SEO at American Precious Metals Exchange, recommended allocations based on individual investment objectives. He indicated that growth-oriented investors might consider larger positions, while income-focused investors could prefer smaller allocations because gold generates no yield.

Blake McLaughlin, executive vice president at Axcap Ventures, cited historical data supporting a gold allocation between 5% and 8%.

"Gold may not offer the outsized return potential of private investments, but the metal holds a set of attributes that are increasingly hard to ignore," said Blake McLaughlin, executive vice president at Axcap Ventures.

Thomas Winmill, portfolio manager at Midas Funds, recommended a long-term allocation of 5% to 15%. He also highlighted the importance of considering risk tolerance and the balance between financial assets and tangible holdings.

Vince Stanzione, CEO and founder at First Information, advocated a substantially larger allocation of 20%, particularly through physical gold or gold exchange-traded funds.

"gold keeps with inflation and gold retains its purchasing power," said Vince Stanzione, CEO and founder at First Information.