Spot gold fell 0.6% to $4,349.94 an ounce on Monday after dropping more than 1% to a session low of $4,322.19. U.S. gold futures settled 0.9% lower at $4,383.90, establishing a weaker close rather than only a temporary intraday move.
The dollar edged higher against six major currencies and extended the gain that followed the Federal Reserve’s rate increase the previous week. A stronger dollar raises the effective cost of bullion for buyers using other currencies, creating pressure even when geopolitical risk remains elevated.
Traders assigned an 88% probability to another U.S. rate increase in December. That figure reflected market pricing rather than a decision already taken, but it raised the opportunity cost of holding gold because interest-bearing assets become more attractive as rates rise.
The metal was about 17% below its February 27 session high. The distance shows how the interaction between inflation, policy tightening and the dollar can dominate the traditional safe-haven narrative even during a period of conflict.
The U.S.-Israeli war with Iran had raised energy costs and inflation concerns, reinforcing restrictive positions among major central banks. At the same time, lower oil prices on Monday supported hopes for diplomatic progress, reducing part of the immediate demand for defensive assets.
Minneapolis Federal Reserve President Neel Kashkari said inflation was too high across all sectors of the U.S. economy, not only oil. His assessment strengthened the argument for tighter policy, although one official’s remarks do not determine the full committee’s next vote.
Other precious metals were mixed. Spot silver eased 0.4% to $65.99 an ounce, platinum gained 0.3% to $1,805.83 and palladium rose 0.4% to $1,307.33, showing that the session was not a uniform retreat across the complex.
Gold’s next direction depends on the dollar, realized inflation, central-bank decisions and developments in the Middle East. The 88% probability and the day’s prices are current market signals; they should not be treated as a guaranteed rate increase or a fixed long-term value for bullion.
