Gold Market Update

Spot gold increased 0.5% to close at $4,177.25 per ounce, while gold futures edged up 0.1% to $4,207.55 per ounce. The modest advance was supported by a rally in U.S. Treasury bonds that reduced the opportunity cost of holding non‑interest‑bearing gold.

U.S. Treasury Yield Movement

The benchmark 10‑year Treasury yield slipped 6.5 basis points, ending the session at 5.246%, and the 30‑year yield fell 2.3 basis points to 5.616%, halting a steep sell‑off that had pushed longer‑term yields toward 20‑year highs.

ISM Manufacturing Data

The Institute for Supply Management’s (ISM) prices index, which tracks raw‑material and input‑price changes for manufacturers, rose to 77.9 in September from 71.1 in August, approaching the March peak of 78.3 recorded at the start of the U.S.–Iran conflict. The ISM overall activity index continued its expansion for a ninth straight month, indicating persistent growth in the manufacturing sector.

Oil Price Surge and Geopolitical Context

Brent crude futures for December delivery climbed 4.3% to $102.21 per barrel. The price jump followed a Wall Street Journal report that the United States was dispatching a third aircraft‑carrier strike group and additional Marine Corps vessels to the Middle East, potentially adding 9,000 to 10,000 troops by the end of November. President Donald Trump told reporters he must “make a decision” on resuming strikes against Iran, stating, “They’ll either sign a very fair deal, or they won’t exist any longer,” and reiterated U.S. control of the Strait of Hormuz, claiming current oil flow through the strait exceeds any historical level.

Recent Gold Performance and Monetary Policy backdrop

Gold experienced a 6% decline in September, marking its steepest monthly drop since June, after the Federal Reserve’s first rate hike since 2023 and signals that further tightening could be required. Global bond yields also rose during the month as concerns over expanding government debt and fiscal deficits lifted term premiums, further pressuring gold’s appeal. HSBC analysts noted that post‑Iran‑conflict liquidation, higher oil, inflation and yields had initially boosted gold, but the September Federal Open Market Committee (FOMC) rate hike, expectations of additional hikes, and rising oil prices pushed the metal back onto the defensive.

Market Outlook

Investors are now looking ahead to Friday’s non‑farm payroll report for additional clues on the Fed’s future rate path. Wednesday’s indicators had suggested stronger U.S. economic growth, a resilient labor market, and cooling inflation, which had sharply reduced market bets on an October Fed rate increase.