Gold Falls to $4,261 as Hormuz Impasse Keeps Rate-Hike Bets Elevated

September 28, 2026 at 02:12 PM2 min

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Gold dropped to $4,261.59 an ounce on Monday, extending a weekly decline of more than 2%. The decline came as an impasse over the Strait of Hormuz kept energy costs elevated, maintaining pressure on the Federal Reserve to raise interest rates further. Brent crude is up 70% this year, while investors see about a 65% probability of a Fed rate hike in October.

Key Facts

Spot gold fell 0.5% to $4,261.59 an ounce at 7:56 a.m. in Singapore on Monday.
Gold ended the previous week down more than 2% and has traded between $4,230 and $4,510 an ounce this month.
Brent crude is up 70% this year as the US-Iran conflict enters its eighth month.
Investors see about a 65% probability of a Federal Reserve rate hike in October.
Gold Fields Ltd. made an approach to acquire Northern Star Resources Ltd., which the Australian miner rejected on Monday.

Gold Price Decline

Spot gold fell 0.5% to $4,261.59 an ounce at 7:56 a.m. in Singapore on Monday. The metal ended the previous week down more than 2% and has traded in a relatively narrow range between $4,230 and $4,510 an ounce this month. Gold remains well below a record high of almost $5,600 reached in January. Silver was down 0.8% to $63.77 an ounce, after declining 3% last week, while platinum and palladium were also lower.

Hormuz Impasse and Fed Policy

Oil rose as Iran said it won't soften its conditions for reopening the Strait of Hormuz after US President Donald Trump rejected its seven-day proposal. The US-Iran conflict is entering its eighth month, with Brent crude up 70% this year. Cleveland Fed President Beth Hammack said Friday that long-term Treasury yields are being driven higher by a stronger growth outlook, concerns about government debt, and expectations for additional interest-rate increases. Fed officials voted unanimously mid-month to raise their benchmark interest rate by a quarter percentage point, and several have since pointed to signs that more rate hikes may be needed. Investors see about a 65% probability of a hike in October, while US consumer sentiment fell in September to a four-month low.

Bond Market and M&A

The extra yield investors demand to hold 10-year Treasuries over two-year notes shrank to as little as 17 basis points last week, the slimmest gap since early 2025. This flattening of the yield curve increases the possibility that it will soon yield less than shorter maturities, a phenomenon watched as an indicator of recession. South Africa's Gold Fields Ltd. made an approach to acquire Australia's biggest gold miner Northern Star Resources Ltd., a potential blockbuster deal the latter rejected on Monday. The Bloomberg Dollar Spot Index was up 0.1% after rising 2% since the start of the month.