Gold rebounded to $4,193.20 an ounce Tuesday, clawing back part of Monday's $144.60 crash to $4,141.30, its lowest level since August 5. The bounce follows a bond-market repricing that has stripped gold of its Federal Reserve rate-cut premium, with a second rate hike now roughly 70% priced for October.
Gold futures for December delivery climbed to $4,193.20 an ounce Tuesday, up $24.80 or 0.59%. The move claws back a slice of Monday's rout, when spot gold lost $144.60 to $4,141.30, the metal's lowest level since August 5. The contract had opened at $4,150.10, down 0.4% from Monday's close. Spot gold then recovered to $4,148.65, up $21.47 from Monday's $4,127.18 settlement. The bounce is real. It is also small next to a bond market that just stripped gold of its Federal Reserve rate-cut premium.
Treasury Yields Reprice the October Fed Meeting
The 10-year Treasury yield traded at 5.264% Tuesday, up two basis points, near levels last seen in 2007. The 30-year yield sat at 5.589%. The Fed raised its funds rate target to 3.75%-4.00% on September 16, its first hike in three years, and futures now price roughly a 70% probability of a second hike in October. Against a Fed inflation projection of 3.7% for 2026, that yield implies a real rate above 1.5% on an asset that pays no income. Gold is down 4.23% over the past week and 6.65% over the past month. Its year-over-year gain has narrowed to 9.5%, the lowest annual growth rate since daily tracking of the metric began. Tuesday's price sits 25.1% below the all-time intraday high of $5,597.23 set on January 29, 2026.
Monday's Crash Traces Back to an Iran Headline
Monday's selloff began when Brent crude surged past $107 on reports that Iranian officials doubted a deal could be reached before November's U.S. midterm elections. The reports followed the president's rejection of Tehran's latest proposal to reopen the Strait of Hormuz. Higher oil revived inflation worries, pushed the 10-year to a 5.27% intraday high, and knocked gold out of the $4,250-$4,350 range it had held through most of September. Gold had built what looked like a floor at $4,300-$4,400 on record central bank demand and nearly $2 billion in ETF inflows ahead of the Fed's September 16 decision. Tuesday's calm came as WTI fell 1.79% to $90.94 and Brent eased to $103.97 on renewed back-channel talks between Washington and Tehran.
Silver and Miners Track the Same Rate Story
Silver futures traded at $61.24 Tuesday, down 0.78%. A heavier Monday decline had already taken the gold-silver ratio to 68.5, and platinum and palladium fell in sympathy. The dollar held flat Tuesday, unwinding Monday's combination of a firm dollar and yields near 19-year highs — a combination that has historically produced the worst outcomes for bullion.
Central banks still bought a record 288.9 tonnes in the second quarter, and the sell-side's $4,900 year-end target has not been cut. Whether the $4,150 low holds through Wednesday's PCE data and Friday's payrolls will decide if Tuesday's bounce becomes a base. If it does not, gold tests $4,000 for the first time since March.
Source: Commodities Analysis & Opinion (Investing.com)
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