Gold Performance 26th October: gold price regains $4,000, Fed up next

The gold price closed at about $4,018 an ounce on Monday 26 October, up $21, or 0.5%, on Friday's close just below $4,000. Oil fell back from a six-month high on hopes of talks over Iran, easing some of the pressure from bets that the Federal Reserve will raise rates again.

It was a quiet start to Fed week, and gold won back the $4,000 mark one session after losing it.

Where the move happened

Gold dipped soon after the Asian open, touching about $3,982. Buyers stepped in from there, and the metal ended Asian hours near $4,009.

London added roughly $10 more, so gold reached the New York morning at about $4,018.

New York hours were the busiest. Gold slipped back under $4,000 in the first hour of trade, to about $3,991, then climbed some $35 inside the next hour. That was the biggest one-hour swing of the day. It touched the day's high near $4,030 in the early afternoon and finished New York hours almost exactly where they began.

Why gold rose

Cheaper oil. Brent crude fell more than 6% at one point on Monday, to around $110 a barrel from Friday's close near $117, its highest since March, Euronews reported. Qatari mediators were reported to have travelled to Tehran on Sunday in coordination with Washington, and President Donald Trump said he was weighing a deal with Iran.

Less inflation pressure on the Fed. Oil has been the channel from the war to US inflation, and from there to rate hike bets. A lower oil price weakens that chain. The bets have not gone, though: CME FedWatch showed 82% odds of a December hike, Reuters reported, even with a pause widely expected on Wednesday. Higher rates make gold, which pays no interest, more costly to hold, as we explain in why gold falls when rates rise.

Our number

Monday's gain does not undo last week. Gold is still down about 3% over the past week, a slide worse than 93% of weekly stretches since 1968 on our data. It sits about 26% below January's record near $5,426, and below both its 50-day average (about $4,297) and its 200-day average (about $4,512). For context on the record, see our gold price history.

Up next: what to watch tomorrow

• Tue 27 Oct: the Federal Reserve's two-day meeting begins, with the rate decision on Wednesday afternoon in Washington. US durable goods orders for September and the Conference Board's consumer confidence index for October land in the New York morning.
• Tue 27 Oct: the US Treasury sells five-year notes, a read on demand for government debt in Fed week. Traders will also watch for news from the talks in Tehran, and whether Brent holds near $110.