Gold consolidating rather than entering bear market, Metals Focus analyst says

what happened

Gold's failure to sustain a rally since its earlier-this-year correction reflects competition for investment capital rather than a fundamental deterioration, Metals Focus director of gold and silver Matthew Piggott said in an interview with Kitco.com. He noted that institutional investors have repeatedly returned to the market when prices fall toward $4,000 an ounce, and central banks have also helped set that floor.

Piggott argued that the forces behind gold's 2025 rally have not gone away. Growing government debt and fiscal uncertainty have, if anything, strengthened the long-term investment case. Large deficits, rising debt-servicing costs and uncertainty over U.S. policy should keep encouraging diversification away from dollar-denominated assets.

On Monday, gold futures edged lower as the dollar firmed, yields rose and oil trimmed its losses. The front-month October Comex gold contract slipped 0.5% to $4,139.00 an ounce, and October silver lost two cents to $56.974 an ounce.

why it matters

The gold market is currently caught between short-term selling from macro-focused traders and demand from investors less sensitive to interest rates. Fed rate expectations, including the 90% odds of a December hike cited by CME's FedWatch tool, and upcoming U.S. PCE inflation data remain key drivers for metals and the dollar.

market impact

Gold and silver: Fed rate expectations and yields set near-term pressure, while safe-haven demand provides support.

tags

instruments