Global gold prices strengthened during Monday’s Asian trading session, as a decline in oil prices offered some relief from inflationary pressures. Buying interest at lower price points also emerged following gold’s drop to a one-year low late last week. Spot gold rose approximately 0.7% to US$3,903.15 per troy ounce, having reached as high as nearly US$3,915.
This recovery follows a 3.7% slump in Friday’s session, which marked gold’s worst October performance since 2008. Sentiment improved following reports that U.S. President Donald Trump intends to allow more time for diplomacy before deciding whether to pursue further strikes against Iran following the U.S. midterm elections.
The drop in oil prices helped ease concerns regarding energy-driven inflation—fears that had previously fueled expectations for a tighter monetary policy from the Federal Reserve. Nevertheless, geopolitical risks remain elevated; Trump has previously left the door open for further strikes against Iran, while Tehran has warned of a broader response should any additional attacks occur.
Gold has also faced pressure from volatility in global stock markets. A sell-off in technology stocks—triggered by concerns over the scale of spending on artificial intelligence—prompted some investors to liquidate their gold holdings to cover losses elsewhere. However, this pressure began to subside during the Asian session, as the decline in regional equities proved less severe than that seen on Wall Street.
Meanwhile, lower prices have begun to attract investor interest, potentially sparking "dip-buying" from market participants and central banks alike. Even so, gold remains in a vulnerable position; a significant portion of the capital that flowed into gold-backed ETFs since mid-July is now underwater, following the sharp decline from the metal's recent peak.
From a technical perspective, the US$3,886 per troy ounce mark serves as a critical level for gold’s short-term price movement. A close below that level could trigger further pressure, while a recovery back above US$4,000 would be required to shift the short-term outlook toward a more neutral stance. In the meantime, market volatility, the direction of oil prices, and developments regarding the U.S.–Iran conflict will remain key factors influencing XAU/USD price movements.
