Gold kicked off its week on Monday, September 28, 2026, with one of its biggest drops within just one trading day in the past few months.
It was trading at $4,275.20 per troy ounce upon opening, a 1.1 percent drop from where it closed on Friday.
The losses continued throughout the day to the extent that by midday, spot gold had lost about 3 percent, to $4,148 to $4,156 an ounce, as per Reuters and other financial market tracking websites.
According to Trading Economics figures, the metal briefly touched $4,122.66 at some point during the session, a loss of almost 3.8 percent for the day.
The losses were not confined to gold alone but were experienced across precious metals. The metal that experienced a deeper loss was silver, which dropped by 4.31 percent to $61.53 an ounce, pushing up the gold to silver ratio to 67.4.
The primary reason was yet another round of rising oil prices. After reports came out about the US not agreeing to re-opening of the Strait of Hormuz by Iran's new proposals, the price of Brent crude oil rose again towards $106 a barrel.
In general, rising oil prices mean growing inflationary pressures, and in this particular case, the CME FedWatch pointed at a 70.3% probability of the Fed increasing its rate in October, up from 64.2% the previous day.
Higher probability of future rate increases is usually a bad signal for gold prices, because the precious metal doesn't pay any interest or dividends and becomes less competitive compared to interest-bearing assets as borrowing costs are going up.
The scenario unfolded on Monday, as the 10-year US treasury yield rose back above 5.2%, and 30-year bond yield went above 5.3%, providing another good reason to choose bonds or cash as investments instead of gold.
The rising price of the US dollar was another reason to sell gold, as it became more expensive for foreign buyers.
The magnitude of Monday's fall is notable against the backdrop of the strong performance of gold in the year gone by. According to Fortune, gold's one-year return had been 95.6 percent, as of late January 2026.
The performance was a result of an exceptional rise in the value of the precious metal due to safe-haven flows, central bank purchases, and concerns about inflation. Gold's price on Monday had still been $328 higher year over year at around $4,150 an ounce.
However, the shorter-term performance of the commodity was quite telling. Data from Trading Economics showed gold down 7.17 percent for the month while also at its lowest levels since August.
Meanwhile, according to Fortune's tracking, the performance over the week was much sharper, with the precious metal losing $148 in value over the previous three trading days.
That is, the performance was that of a metal sharply rising on an annual basis but dropping rapidly in the near term.
Given the fact that gold is considered to be an asset that usually acts as a refuge asset when there are some signs of political turmoil, the fall of gold in such a situation might seem strange.
However, one should understand the following aspect that affects the performance of this type of asset: it is quite rate sensitive and, therefore, when there is a geopolitical event that causes the rise in oil prices and makes the rise in the level of rates more likely,
it might result in a stronger negative influence of the increase in the rate than the positive influence of the geopolitical situation itself.
As CNBC Select reports, gold is known to be a stable asset and a good hedge against inflation, which may work effectively in market crises, but the main drawback of gold is in the fact that it does not provide any income in the form of dividends or interest.
Forecasts for the remainder of the month and even farther into the future appear quite wide as well.
LiteFinance believed that during September, gold might trade somewhere between $4,136 and $5,304 per ounce, with a most probable estimate of a price rally up to $5,051 at month's end and a more pessimistic one at about $4,443.91.
In the long run, LiteFinance appeared quite bullish for the year as a whole, predicting gold trading range between $4,795 and $5,897.03 at year-end, implying that Monday's drop was interpreted by some analysts as just another step back in a bigger bull-run.
This week, investors can expect a number of important US economic data releases, such as the consumer confidence reading, job openings and employment figures, which may shift rate expectations even further.
