Gold tumbled 3% on Monday, hitting a seven week low, as Treasury yields and oil prices increased, making traders bet on tighter monetary policy.
The drop followed heightening tensions between the U.S. and Iran after Tehran refused to soften conditions to reopen the Strait of Hormuz, a key energy chokepoint to the Persian Gulf, and U.S. President Donald Trump refused to agree to an Iranian-proposed compromise.
December gold futures fell 2.3% last week to settle at $4,321.20 an ounce on Comex, though the front-month contract rose 0.5% Friday. Bullion is down 3.6% this month after rising 9.1% in August and gaining 1.7% in July. It is down 0.5% so far this year after rallying 64% in 2025. The December contract is down $147.4 (-3.41%) an ounce to $4173.80 and the DG spot price $4141.30.
Investors are closely watching the next key inflation report, due this week in the Fed’s favorite inflation measure, the personal consumption expenditures price index. It will come out Wednesday with August data. The PCE data will be followed on Friday by the key U.S. monthly jobs report for September. The Fed closely watches both inflation and the labor market when setting monetary policy.
The Fed earlier this month raised interest rates for the first time in three years, increasing the benchmark rate to 3.75% to 4.00%, in large part because of inflation linked to high energy prices. The central bank indicated that another hike might be coming this year.
More than 68% of the investors tracked by the CME FedWatch Tool are now betting that the Fed will raise interest rates by another 25 basis points in October. Before this month’s rate hike, the Fed had kept interest rates unchanged this year after three previous rate cuts. The next Fed policy meeting is Oct. 28, six days before the U.S. midterm elections. The higher prices of goods are being seen as a pivotal issue in the election.
Consumer sentiment slid to a four-month low in September data released Friday by the University of Michigan. Meanwhile, demand for durable goods was unchanged in August, according to data released separately Friday by the Commerce Department. Analysts had expected a decrease of 0.3%.
December silver futures decreased 3.5% last week to settle at $64.80 an ounce on Comex, though the front-month contract rose 1.3% Friday. The most-active contract touched a record above $115 in January. Silver is down 3.3% this month after climbing 16% in August and sliding 3.6% in July. It is down 8.2% so far this year after rising 141% in 2025. The December contract is currently down $2.976 (-4.59%) an ounce to $61.825 and the DG spot price is $61.34.
Spot palladium fell 3.2% last week to $1,274.00 an ounce, but edged up 0.1% Friday. Palladium is down 6.5% this month after rallying 5.7% in August and adding 5.8% in July. It is down 21% in 2026 after rising 74% last year. Currently, the DG spot price is down $60.00 an ounce to $1216.00.
Spot platinum lost 1.7% last week to $1,779.30 an ounce but rose 1.7% Friday. Platinum is down 0.4% this month after increasing 7.5% in August and gaining 6.6% in July. Platinum is down 12% so far this yar after increasing 122% in 2025. The DG spot price is currently down $53.40 an ounce to $1732.30.
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