Gold lingers near one-year low as Fed hike expectations firm

AP

Fundamentals

Spot gold was up 0.5% at $3,894.89 per ounce by 0042 GMT but hovered near its lowest level since October 2025, touched in the previous session. US gold futures for December delivery rose 0.1% to $3,903.90.

Bullion hit its lowest since October 2025 on Friday, falling below its key $4,000 per ounce level amid a sharp fall in technology stocks that led to forced selling of safe-haven assets such as gold and margin calls, analysts at Commerzbank said in a note on Friday.

A trio of Fed officials made the case on Friday for more interest rate increases to combat high levels of inflation, in the first round of commentary made by central bankers after last week's monetary policy meeting that saw short-term borrowing costs left steady.

Data showed US inflation accelerated in September as consumers paid more for gasoline and other goods, supporting economists' expectations of an interest rate increase from the Fed in December.

Traders are pricing in about a 75% chance of a rate hike in December, according to the CME's FedWatch Tool.

Higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors.

Iranian negotiators were in Doha on Sunday for a third consecutive day of talks with Qatari mediators aimed at pushing for a deal to end the US-Israeli war on Iran, an official briefed on the discussions told Reuters.

Euro zone inflation is expected to be sharply higher this year and next than earlier predicted, and may only return to the European Central Bank's 2% target in 2028, the bank's Survey of Professional Forecasters showed on Friday.

Elsewhere, physical gold demand in key Asian markets remained subdued last week, with Indian buyers delaying purchases in anticipation of a further decline in prices, while demand in top consumer China stayed muted.

Spot silver gained 1.2% to $49.6935 per ounce, platinum rose 0.8% to $1,446.05 and palladium climbed 1.1% to $986.76.

Data/Events (Gmt)

0030 Japan S&P Global Mfg PMI Final SA, October

0145 China RatingDog Manufacturing PMI Final, October

0850 France S&P Manufacturing PMI, October

0855 Germany S&P Manufacturing PMI, October

0900 EU S&P MFG Final PMI, October

0930 UK S&P Global Manufacturing PMI, October

1430 US S&P Global Mfg PMI Final, October