Gold Edges Up Amidst Inflation Fears and Rate Hike Bets
Gold prices saw a slight increase in early Asian trading Monday, but remain near a one-year low as inflation concerns and anticipated US monetary tightening...
The Cliff News | 2 November 2026
Gold prices experienced a modest uptick in early Asian trading on Monday, November 2, as investors cautiously assessed the market following a significant correction last week. Despite the marginal recovery, bullion remained in close proximity to a one-year low, with persistent inflation worries and expectations of a tighter US monetary policy continuing to exert downward pressure.
Spot gold saw a 0.5% rise, reaching $3,894.89 per ounce by 0042 GMT. Concurrently, US gold futures for December delivery climbed 0.1% to $3,903.90. These early gains did little to significantly alter prices from Friday's levels, which saw gold dip below the crucial $4,000 per ounce mark for the first time in over a year.
US Interest Rate Hike Prospects
The recent weakness in gold prices is largely attributed to growing anticipation that the US Federal Reserve may implement an interest rate hike in December. This potential move is aimed at curbing persistent inflation, which accelerated in September with increased costs for gasoline and other consumer goods. The sentiment for further rate increases was bolstered by remarks from three Fed officials on Friday, marking the first public commentary since the preceding monetary policy meeting where borrowing costs were held steady.
Current market sentiment, as indicated by the CME FedWatch Tool, suggests approximately a 75% probability of a December rate hike. Higher interest rates typically dampen the appeal of gold, a non-yielding asset, by making interest-bearing investments comparatively more attractive.
Domestic Bullion Market Impact
The global sell-off has also directly impacted domestic bullion prices in India. In New Delhi, gold of 99.9% purity saw a significant decline of ₹3,200, settling at ₹1,42,000 per 10 grams on Saturday. Silver prices followed suit, dropping by ₹4,200 to ₹1,86,000 per kg. Both precious metals extended their losses for a second consecutive trading session.
Factors Driving Market Weakness
Analysts at Commerzbank linked the slump in gold prices to a sharp downturn in technology stocks. This sell-off reportedly triggered forced selling of safe-haven assets and margin calls, further exacerbating the price decline. In parallel, physical demand in key Asian markets remained subdued last week. Indian buyers postponed their purchases in anticipation of further price drops, while demand in China remained muted.
Other Precious Metals Performance
Silver prices are also under close observation. Spot silver experienced a 1.2% gain, reaching $49.6935 per ounce in early Asian trading on Monday. In other precious metals, platinum rose by 0.8% to $1,446.05 per ounce, and palladium advanced 1.1% to $986.76.
Investor attention will remain fixed on developments concerning the US-Iran conflict, incoming inflation data, pronouncements from central banks, and evolving expectations surrounding the Federal Reserve's upcoming policy decisions. Ongoing diplomatic talks between Iranian negotiators and Qatari mediators in Doha could also prove influential on market sentiment.