Gold Rebounds Nearly 2% Toward $3,960 After Brutal Friday Slide to One-Year Low as Fed Rate-Hike Fears Linger

Gold prices rebounded nearly 2% on Monday, recovering part of a steep sell-off on Friday that sent the precious metal to its lowest level in a year.

Spot gold rose $73.31, or 1.89%, to $3,958.84 an ounce in morning trading in New York, according to GoldPrice.org.

The gain came after gold fell about 3.5% on Friday to close near $3,875, its lowest level in about a year. The metal lost about 3.1% last week.

Relief bounce

Analysts described Monday's move as a relief rally within a broader downtrend.

Gold has fallen about 5.8% over the past month and is down about 2.5% compared with a year ago, according to Trading Economics.

The decline marks a sharp reversal for a metal that hit a record high of about $5,590 an ounce in late January. Gold is now about 30% below that peak.

Rate-hike worries

Gold's recent slide has been driven largely by expectations that interest rates will remain high, or even rise further, as inflation stays elevated.

The U.S. Federal Reserve held its benchmark rate at 3.75% to 4% at its most recent meeting, but two policymakers dissented in favor of a rate increase. Markets are pricing in the possibility of a hike in December.

Higher interest rates tend to weigh on gold because the metal does not pay interest, making it less attractive compared with bonds and other yield-bearing investments.

Other central banks are also tightening policy. The Reserve Bank of Australia and the Bank of England are both expected to raise interest rates this week.

Energy prices and inflation

Rising energy prices have added to inflation concerns. The conflict in the Middle East and disruptions to oil shipments through the Strait of Hormuz have pushed oil prices sharply higher this year.

On Monday, however, oil prices fell more than 4% on hopes for talks between the United States and Iran, which could ease some inflation pressure.

Other metals

Other precious metals also moved higher. Silver rose about $1.94 to around $51.47 an ounce, according to JM Bullion. Platinum edged higher, while palladium slipped.

Economic data in focus

Investors are watching a busy week of economic data and events that could influence the outlook for interest rates.

The Institute for Supply Management's manufacturing index was due Monday. Friday brings the U.S. jobs report for October, a key indicator for the Fed.

Tuesday's U.S. midterm elections could also add volatility to financial markets.

A volatile year

Gold has had one of its most volatile years in recent memory. The metal surged to record highs early in 2026, driven by central bank buying, geopolitical tensions and investor demand for safe-haven assets.

Late last year, many Wall Street forecasters expected gold to keep rising. A Goldman Sachs survey of institutional investors in November 2025 found that nearly 70% expected gold to exceed $4,500 an ounce by the end of 2026.

Instead, gold has slid sharply from its January peak as the interest rate outlook shifted.

Global prices

In India, one of the world's largest gold markets, prices rose about 0.66% on Monday, with 24-karat gold trading at about 141,893 rupees per 10 grams in Delhi.

What's next

Analysts say gold will need to reclaim key levels to signal that its downtrend has ended. Some technical analysts have pointed to around $3,965 as a level to watch on the upside and $3,875 as support.

The metal's direction in the coming weeks is likely to depend on interest rate expectations, inflation data, oil prices and developments in the Middle East.