Gold had its worst session in weeks on Monday, September 28, with the spot price dropping as much as 4% intraday to $4,111 an ounce, the lowest level since August 5. The metal closed the day at $4,131, down 3.8%, while silver fell even more, 5%, to $61.02 an ounce. On Tuesday gold is trying to regain ground, trading back above $4,160.91 at the time of writing, but the underlying picture is the same as on Monday.

Why gold is falling

The common denominator behind the slide is the market’s bet on a further interest rate hike by the Federal Reserve. Markets are pricing roughly a 70% probability of another quarter-point increase at the October meeting.

The prospect of higher rates has pushed the yield on the 10-year US Treasury note to 5.23-5.25%, the highest since 2007, and the US dollar index (DXY) toward a two-month high, in the 101.2-101.3 area. A stronger dollar and higher real yields make it less attractive to hold an asset that, like gold, pays no interest.

«The new multi-decade highs in the cost of US debt have finally made the price of gold give way,»

said Adrian Ash, head of research at BullionVault, as quoted by Reuters.

The picture is completed by a drop in money managers’ net long positions in gold to their lowest since late July, modest outflows from gold exchange-traded funds (ETFs) of 1.6 metric tons, and weaker Chinese physical demand ahead of the early-October holiday week, with premiums on the local market falling close to zero.

From record high to a correction of more than 25%

The recent decline should be read within a broader trajectory. Gold hit an all-time high of $5,589 an ounce on January 28, 2026, at the peak of a run in which the metal set roughly one new record a week for much of 2025.

Since then gold has been on a downward path, interrupted by temporary rebounds. In early August, when the price had already fallen about 28% from its peak, Deutsche Bank put its year-end “fair value” at $4,700, betting on a recovery. In mid-September the metal had already logged a third consecutive weekly decline ahead of the Fed meeting of September 16-17. At current levels, around $4,150-$4,180, gold remains below Deutsche Bank’s target and more than 25% under its January high.

Editor’s note

This article was originally published in Italian on money.it by Ufficio Studi Money.it on September 29, 2026 as «L’oro scivola ai minimi da due mesi. La scommessa su un nuovo rialzo Fed a ottobre affonda il metallo giallo». It has been translated and adapted for an international audience by the Money.it International desk.