Gold stabilizes near its lowest level in three months… Awaiting the Federal Reserves decision and pressures from oil and inflation.

Gold prices held steady on Monday, October 26, 2026, near their lowest levels in almost three months, after posting weekly losses exceeding 4%, as investors awaited the US Federal Reserve meeting and assessed the impact of rising energy prices on inflation and the path of interest rates. Spot gold rose 0.2% to $4,005.41 per ounce, while US gold futures climbed 0.3% to $4,017.45.

The precious metal had fallen below $4,000 an ounce on Friday for the first time since mid-July, posting weekly losses of 4.1%, amid growing concerns about persistent inflationary pressures and the likelihood that US monetary policy will remain tighter for a longer period.

The recent decline in gold prices coincided with a rise in crude oil prices, as a result of the ongoing conflict in the Middle East, with Brent crude recording weekly gains of 6.2%, reaching its highest weekly closing level since mid-2022. However, oil prices fell during trading on Monday, amid signs of diplomatic moves aimed at easing regional tensions.

Higher energy prices affect gold by increasing transportation, production and distribution costs, which could lead to continued inflationary pressures within the US economy.

With inflation remaining high, the Federal Reserve may find it difficult to cut interest rates, increasing the appeal of yield-generating assets compared to gold, which does not generate periodic income.

Although gold is a major hedge against inflation and geopolitical risks, rising interest rates and government bond yields may reduce its investment appeal, especially when higher-yielding assets become more competitive.

The Federal Reserve is monitoring inflation, and markets are preparing for an interest rate hike in December.

All eyes are on the US Federal Reserve meeting scheduled for October 27 and 28, where expectations point to interest rates remaining unchanged. Investors are focused on the central bank’s assessment of inflation trends and any signals it might provide regarding future monetary policy decisions. According to data from the CME FedWatch tool, markets were pricing in a 78% probability of an interest rate hike at the December meeting.

These expectations follow the release of US consumer inflation and producer price data, which came in higher than market forecasts, reinforcing concerns about continued price pressures despite ongoing economic expansion. Gold thus remains under pressure from a complex balancing act between its role as a safe haven during times of geopolitical tension and the impact of rising US interest rates and yields on the cost of holding it.

Gold’s movements in the coming period will remain largely dependent on the Federal Reserve’s decision, developments in US inflation, and the direction of oil prices. Continued inflationary pressures may lead to a postponement of interest rate cuts, while any signs of easing tensions or improved monetary policy expectations may give the precious metal a chance to recover some of its recent losses.