XAUUSD: Gold Reclaims $4,000 as Fed Week Begins. Silver Sinks to 2026 Lows

Bullion rebounds after its worst week since June as softer oil prices offer relief.

📈 Buyers return after a difficult week

• Spot gold XAUUSD recovered about 0.4% to $4,010 an ounce early Monday, reclaiming the $4,000 threshold after initially trading below it.
• The rebound follows a roughly 4% weekly decline, gold’s steepest since June. Friday’s selling took bullion to its lowest level since mid-July.
• Silver also recovered, rising 0.6% to $54.15, but still hovering at a low not seen since November 2025. Its outlook has an additional complication: industrial demand makes it sensitive to economic growth alongside interest rates and investment flows.

🏦 Oil and interest rates shape the outlook

• Softer oil prices provided some breathing room. Brent retreated toward $115 following reports of Qatari mediation efforts in Tehran, although ongoing attacks in Saudi Arabia kept supply concerns alive.
• An energy shock can raise both defensive demand and inflation expectations in the gold market, leaving the anticipated central-bank response especially important.
• The Fed is widely expected to hold rates Wednesday, while traders assigned a 75% probability to a December increase in the latest snapshot.
• Gold pays no interest, so expectations of higher borrowing costs can increase the appeal of interest-bearing alternatives and restrain bullion even during periods of geopolitical uncertainty.

🤑 Dollar’s impact on gold

• Lower Treasury yields and a softer dollar offered counterweights. The US 10-year yield traded near 4.97%, while the dollar index eased toward 101.64.
• Dollar weakness can make bullion less expensive for overseas buyers, but a lasting recovery also depends on how yields and inflation expectations evolve together.
• Thursday brings another major test after the Fed announcement. September PCE inflation and the first estimate of third-quarter US GDP arrive at 8:30 a.m. ET. Economists expect core PCE inflation around 3.1% annually.

📊 Holding $4,000 becomes the immediate challenge

• Friday’s low near $3,975 is the nearest clearly observed downside reference. Holding above it would preserve the possibility of a recovery, while a sustained break beneath it would extend the recent sequence of losses.
• Lower prices are attracting some physical buyers. Reuters reported stronger Indian purchases during the Dussehra festival last week, while Chinese demand remained steady despite cautious jewelry spending.
• That offers a source of underlying support, although this week’s immediate direction is likely to depend heavily on policy guidance, yields and the dollar.