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What happened
Gold came under pressure in Monday’s session as spot gold fell 1.5% to $4,223.95 per ounce as of 0117 GMT, with U.S. gold futures dropping 1.5% to $4,257.90, according to Reuters.
Key figures:
- Spot gold: -1.5% to $4,223.95/oz
- U.S. gold futures: -1.5% to $4,257.90
- Silver: -2.6% to $62.64
- Platinum: -2.1% to $1,741.45
- Palladium: -2.1% to $1,239.95
Why it matters
Metals were hit by a one-two punch: oil prices rebounded more than 1% after Trump rejected Iran’s Hormuz proposal, reviving inflation fears, while traders now price a 66% chance of an October Fed hike per CME FedWatch. Higher energy costs feed inflation across the economy, locking in hike expectations — and higher rates raise the opportunity cost of holding non-yielding gold. It is the classic higher-for-longer headwind.
“The high bond yields and high oil price tandem continues to act as a thorn in gold’s side,” said Tim Waterer, chief market analyst at KCM Trade.
Silver and platinum fell harder because their industrial exposure leaves them more vulnerable to a tighter-policy, slower-growth mix. Cleveland Fed President Beth Hammack added to the caution on Friday, saying she is concerned persistently high inflation risks conditioning the public to accept elevated prices as the norm — exactly the backdrop that keeps hike bets alive.
What to watch
It is a heavy macro week. The PCE price index lands Wednesday, preceded by job openings and the ADP employment report, and nonfarm payrolls hit Friday (October 2, consensus near 90,000 jobs). The RBA decides on rates Tuesday, and investors will watch whether October hike pricing firms further above 66% heading into the FOMC meeting.
Related reading: Oil Rebounds: Brent Climbs Past 106 After Trump Rejects Iran Peace Deal and UBS Warns Markets Overprice October Fed Hike, Sees One Hike Then Pause
Is gold’s pullback a buying opportunity on the dip, or the start of a deeper correction as hike bets firm up?
Auto-posted by the Bull Lounge news desk.
Not financial advice.Source: Reuters
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