Gold bounces back, rising early Monday from the one-year low it hit last week, as investors bought the dip and oil prices dropped ahead of the mid-terms.
Lower oil prices reduced inflationary fears, mitigating expectations of an upcoming Federal Reserve interest rate hike, which would be considered bearish for gold. The yellow metal becomes a less attractive asset to investors when rates rise.
The upcoming U.S. midterm elections on Tuesday and the continued conflict between the U.S. and Iran added uncertainty to the markets which typically bolsters bullion. Inflationary fears have climbed alongside oil prices since the start of the Iran war earlier this year, though oil prices were lower Monday after Axios reported over the weekend that President Donald Turmp wants to give diplomacy more time before deciding whether to resume strikes on Iran following the midterms. The conflict has curbed oil shipments through the vital Strait of Hormuz waterway.
December gold fell 2.7% last week to settle at $3,898.90 an ounce on Comex, after the front-month contract tumbled 3.3% Friday. Bullion dropped 6.9% last month after losing 6.6% in September and rising 9.1% in August. It’s down 10% so far this year after rallying 64% in 2025. The December contract is currently up $72.20 (+1.85%) an ounce to $3979.10 and the DG spot price is $3963.00.
It was front-month gold futures’ first settlement below $4,000 since Nov. 6, 2025.
Part of last week’s drop followed a rout in technology stocks. Many electronics components use precious metals, so a potential decline in manufacturing would translate into a decline in some demand.
Additionally, over 76% of the investors tracked by the CME FedWatch Tool are betting that the Fed will rase rates by 25 basis points in December, with the rest expecting rates to remain unchanged. Last week, the Fed kept interest rates at 3.75% to 4.00%, though the vote included two dissentions. The Fed raised its benchmark rate by 25 basis points in September.
The day after the Fed decision, the personal consumption expenditures price index—the Fed’s favorite inflation measure—came out with September data which showed that inflation accelerated in September.
Core PCE, which excludes volatile food and energy prices, rose 3.1% in September from a year earlier compared with 3% in August. The figure gained 0.3% month on month. The Fed has a 2% inflation target. Headline PCE rose 3.6% for the year, up from 3.4% in August, and increased 0.5% for the month.
The Fed closely watches both inflation and labor market data when setting monetary policy. Key U.S. jobs data for October is due out at the end of this week.
December silver futures slid 8.7% last week to settle at $49.28 an ounce on Comex after the front-month contract declined 5.9% Friday. The most-active contract touched a record above $115 in January. Silver plummeted 19% last month after falling 9.6% in September and climbing 16% in August. It is down 30% so far this year after rising 141% in 2025. The December contract is currently up $1.679 (+3.41%) an ounce to $50.955 and the DG spot price is $50.85.
Spot palladium lost 5.8% last week to $991.50 an ounce after dropping 1.9% Friday. Palladium fell 18% last month after losing 11% in September and rallying 5.7% in August. It’s down 39% in 2026 after rising 74% last year.
Spot platinum fell 7.9% last week to $1,437.70 an ounce after dropping 3.5% Friday. Platinum slid 16% last month after falling 4.6% in September and increasing 7.5% in August. Platinum is down 29% so far this year after increasing 122% in 2025.
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