Gold rebounds above $3,900 as oil slump eases rate-rise concerns

Spot gold increased 0.7% to $3,902.03 an ounce by 12:39 p.m. GMT on Monday, recovering from a one-year low reached the previous day. December futures on the New York Mercantile Exchange rose 0.3% to $3,911.50. Silver outperformed, gaining 2% to $50.08 an ounce after slipping below $50 on Friday for the first time in 11 months. Platinum fell 0.2% to $1,428.45 and palladium dropped 0.8% to $968.59, each extending losses from the prior session.

Oil prices declined more than 4% as Iranian and Qatari officials continued talks aimed at de-escalating the U.S.–Israeli conflict with Iran. Lower crude prices are expected to ease price pressures across the economy, reducing the likelihood that the Federal Reserve will keep interest rates high for an extended period. Because gold yields no interest, it becomes more attractive when bond and cash returns are expected to fall.

A sharp sell-off in technology and artificial-intelligence stocks on Friday forced investors to raise cash, prompting a broader sell-off of safe-haven assets, including gold. Analysts said the liquidation, rather than a fundamental shift in the long-term outlook for bullion, largely explains last week’s decline.

"Optimism about a diplomatic breakthrough between the U.S. and Iran, together with renewed doubts about the durability of the AI boom, raised questions about how much longer the Fed needs to keep tightening, which helped gold recover. But this recovery may be short-lived," said Nikos Tzabouras, an independent financial markets analyst.

Investors are now looking ahead to Tuesday’s U.S. midterm elections for clues on fiscal policy and market sentiment.

"Markets are likely to approach the midterms cautiously, as they could mark a turning point in the Middle East conflict, while the tech selling that pushed investors to sell gold to cover losses elsewhere may persist and keep pressure on the precious metal," Tzabouras added.

Despite the rebound, both metals remain well below their yearly highs. Gold stays far under its January record, and silver has lost more than half its value from its 2026 peak. Treasury yields remain elevated and the Fed continues to describe inflation as high, conditions that continue to weigh on non-yielding assets. Analysts note that a sustained move above $4,000 for gold or above $50 for silver would be needed to signal a more durable recovery.