Gold prices continued their downward trajectory on Friday, extending a sharp sell-off that saw the precious metal drop 2% in the previous session.
The decline was driven by renewed inflation concerns as Brent crude oil surged back above the $100 per barrel threshold, complicating the macroeconomic outlook ahead of the Federal Reserve's upcoming policy meeting.
The rebound in energy costs has strengthened the case for higher interest rates or a slower pace of easing, weighing heavily on non-yielding assets like gold.
Market participants are increasingly pricing in a hawkish stance from the Fed, fearing that persistent energy-driven inflation could derail the current monetary policy path.
This dynamic has intensified selling pressure on the precious metal, which had already retreated to its lowest level in seven months earlier in the week.
The interplay between oil and gold remains a critical focal point for traders.