Gold Stays Under Pressure

Gold traded below $4,000 an ounce on Monday, hovering near its lowest level in more than three months as investors weighed escalating geopolitical tensions in the Middle East and prepared for key central bank decisions this week. The Trump administration is weighing whether to pursue a deal with Iran or resume military strikes following next week’s midterm elections, amid growing threats to Americans across the region. Tehran is reportedly ready to retaliate, potentially targeting Israel and the UAE. The Middle East conflict has driven energy prices sharply higher this year, fueling inflation concerns and strengthening expectations of higher interest rates, which tend to pressure non-yielding assets such as gold. Meanwhile, the Federal Reserve is widely expected to leave interest rates unchanged this week, before potentially raising them in December. Central banks in the Eurozone and Japan are also anticipated to maintain their current interest rates.

Gold prices fell below $4,000 an ounce on Friday, hitting their lowest level since mid-July and putting the precious metal down almost 4% for the week, as rising oil prices strengthened expectations that US interest rates will remain higher for longer. Brent crude surged to a four-year high after Houthi attacks in Saudi Arabia heightened concerns over further energy supply disruptions. Meanwhile, recent US data showed consumer and producer inflation rising more than expected, largely driven by higher energy costs, reinforcing concerns over persistent inflationary pressures. Despite this, Federal Reserve officials are widely expected to leave interest rates unchanged at their October 27–28 meeting. Markets currently price in just a 10% chance of a rate hike next week, compared with odds of around 80% for December, according to CME’s FedWatch Tool. Investors now await US PCE inflation data due October 29 for further clues on progress towards the Fed’s 2% inflation target.

Gold decreased below 4000, according to trading on a contract for difference (CFD).