Gold climbs above $4,000 as oil prices fall and rate outlook shifts

Spot gold gained 0.5% to $4,014.49 per ounce on Monday, moving back above the $4,000 level after slipping to $3,975 on Friday, its lowest point since July 20. The rise coincided with a 2% drop in Brent crude futures, which fell to around $114 a barrel after reaching a six-month high the previous week.

"This 4,000 level is seen by some as a buying opportunity. So we should eventually see slightly stronger purchases stepping in, because it has also, from a technical perspective, helped very well in the past," said Giovanni Staunovo, a UBS analyst.

Staunovo added that lower oil prices are providing additional support for gold, but the metal's upside could be limited by expectations that the Federal Reserve may raise rates in December and possibly again next year, even if it holds rates steady at this week's meeting. Traders assign a 9% probability to a rate hike on Wednesday and an 80% chance of a December increase, according to the CME FedWatch Tool.

Higher interest rates raise the opportunity cost of holding non-yielding gold. Investors are also watching the upcoming release of U.S. personal consumption expenditures data on October 29, the Fed's preferred inflation gauge, as well as policy decisions from the European Central Bank and the Bank of Japan, both expected to keep rates unchanged for now.

Other precious metals showed modest moves: spot silver rose 0.2% to $53.99 per ounce, platinum slipped 0.3% to $1,547 per ounce, and palladium fell 0.1% to $1,043.47 per ounce.