Gold price weekly chart may post the largest drop in four months as Federal Reserve's high interest rate expectations weigh on the market

1. Gold prices continued to decline on Friday, with spot gold once falling below the 4,000 mark, dropping nearly 1% to $3,986.78 per ounce, the lowest since July 20. It has since rebounded slightly to around $4,018 per ounce. On a weekly basis, it has fallen over 3.5% so far, possibly recording the largest drop in more than four months. Rising oil prices and strong U.S. economic data have reinforced market expectations that the Federal Reserve will keep interest rates elevated for a longer period.2. Oil prices rose about 4% on Thursday, reaching a five-month high. On Friday during Asian trading, Brent crude once hit a five-month high of $114.68 per barrel, as Houthi attacks on Saudi Arabia raised concerns in the market about possible further disruptions to energy supply in this major export region. Persistently high energy prices increase the opportunity cost of holding non-yielding gold and also bolster expectations that the Federal Reserve will extend its high interest rate cycle.3. The number of first-time jobless claims in the United States last week fell to its lowest level in nearly 57 years, indicating that job growth in October may have accelerated moderately. The market focus has shifted to the Federal Reserve's policy meeting on October 27-28 and the release of the PCE price index next week. Traders currently estimate only a 7% chance of a rate hike by the Federal Reserve next week, but expectations for a December hike remain at 81%.