Market Overview
Gold prices fell on Monday, with spot gold down 1.2% to $4,298.80 per ounce and gold futures down 1.6% to $4,340.00 per ounce. The decline was driven by a strengthening U.S. dollar that reached a near two‑week high and by rising oil prices.
Federal Reserve Rate Expectations
The CME FedWatch tool indicated that the probability of a Federal Reserve rate hike rose to 92.5%, up from 87.3% the previous day and 59.4% a week earlier. A hike would be the first since July 2023. The market is anticipating a quarter‑point increase later this week.
Bond Market Reaction
The benchmark U.S. 10‑year Treasury yield briefly touched 5% on Monday, the first time it had reached that level since October 2023, reflecting tighter monetary conditions.
Oil Market Dynamics
Crude benchmarks have surged nearly 20% over the past two weeks amid renewed military strikes between the United States and Iran and a widening conflict between Saudi Arabia and Iran‑backed Houthi rebels in Yemen. Brent crude futures settled 1.5% higher at $106.23 a barrel on Monday.
Gold Technical Commentary
David Morrison, senior market analyst at Trade Nation, noted that gold may be forming the right‑hand side of a head‑and‑shoulders pattern, which, if completed, could push prices toward $4,000 per ounce. He added that the daily MACD suggests downside momentum, making a retest of support around $4,200 possible.
Geopolitical Notes
President Donald Trump said Iran wanted to make a deal “quickly and badly,” and indicated the United States was open to engagement. The Iranian Labor News Agency reported that the U.S. was seeking a “step‑by‑step” agreement with Iran. Following these comments, oil prices pulled back, limiting further gains in gold.
Recent Gold Range
Gold has been trading in a relatively narrow band around $4,400 since rebounding from a floor near $4,000 in July, as investors continuously reassess Fed policy outlook.
Analyst Forecasts
ANZ forecasts three 25‑basis‑point Fed rate hikes by March 2027, driven by higher inflation from escalating Middle‑East tensions and energy price pressures, but expects gold’s safe‑haven appeal to remain intact.