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Gold
Source: Newsmaker.id
Global gold prices remained relatively stable during Monday’s trading session (October 26), following their sharpest weekly decline since June. Spot gold traded at approximately US$3,996.80 per troy ounce as of 06:18 WIB, coming off a more than 4% drop over the previous week. This movement reflects investor caution amid uncertainty surrounding global energy prices and anticipation of the Federal Reserve’s (The Fed) upcoming monetary policy decision.
Meanwhile, oil prices have begun to undergo a limited correction from a six-month high, following statements from U.S. President Donald Trump that he is nearing a decision regarding a potential agreement with Iran—or, alternatively, the pursuit of military action.
Gold remains under pressure, driven by high energy costs that have heightened the risk of global inflation. Although oil prices have begun to soften, concerns regarding supply disruptions stemming from the U.S.-Iran conflict have not entirely dissipated. Furthermore, U.S. consumer sentiment fell to a five-month low in October, signaling waning public confidence in the economic outlook. This creates a dilemma for the Fed: persistent inflationary pressure may limit the scope for interest rate cuts, yet an economic slowdown necessitates more accommodative policy support.
Investor attention is now focused on the upcoming Fed meeting on October 27–28, with the market pricing in a roughly 10% probability of an interest rate hike.
While the U.S. central bank is widely expected to keep interest rates unchanged, the surge in energy costs has fueled speculation regarding potential monetary tightening before the end of the year. The prospect of higher interest rates acts as a significant headwind for gold, as it enhances the appeal of yield-bearing assets. Furthermore, selling pressure on artificial intelligence (AI)-related technology stocks has also impacted the precious metals market, as some investors have liquidated their gold holdings to meet liquidity needs and cover losses in the stock market.
Newsmaker observes that the short-term outlook for gold remains clouded by a combination of inflationary pressures, geopolitical uncertainty, and expectations regarding U.S. monetary policy. Since the onset of the U.S.-Iran conflict in late February, the price of gold has reportedly lost approximately a quarter of its value—a reflection of the significant pressure weighing on the precious metal.
The psychological level of US$4,000 per troy ounce has now become a primary focus for the market. Should the Federal Reserve signal a tighter monetary policy and U.S. bond yields resume their rise, gold risks further decline. Conversely, an easing of tensions in the Middle East, a drop in oil prices, and signals of a more accommodative monetary policy could pave the way for a recovery in gold prices.