Gold · Daily Analysis
Gold Falls as December Rate-Hike Odds Hit 88% and Kashkari Warns on Inflation
Executive Summary
At the close of trading, the price of gold fell by approximately $29 (-0.7%), declining from around $4,379 to $4,350 per troy ounce. During the session, gold fell more than 1% to a low of approximately $4,322 before recovering part of the decline.
Fundamental Analysis
The main pressure came from growing expectations that the Federal Reserve could raise interest rates again later this year. Markets were pricing an 88% probability of a December rate hike, according to the CME FedWatch Tool.
The outlook for U.S. monetary policy was also reinforced by comments from Minneapolis Fed President Neel Kashkari. He said inflation remained too high across the U.S. economy and was not limited to higher oil prices. This raised concerns that the Federal Reserve could remain restrictive for longer, particularly while energy prices continue to create inflationary pressure.
The dollar provided another source of pressure. The U.S. dollar index had already risen more than 1% following the Federal Reserve's rate hike the previous week and reached a more than two-month high on Friday. On Monday, the dollar extended its gains.
Energy prices remain an important part of this equation because the U.S.-Israeli war with Iran has pushed energy prices higher. This has created an environment where geopolitical tensions can simultaneously support safe-haven demand for gold while also putting pressure on the metal through inflation and interest-rate expectations.
Gold is therefore facing conflicting forces. The geopolitical conflict supports demand for a safe-haven asset, but the resulting energy-price shock is increasing inflation concerns and strengthening expectations for tighter monetary policy. At the same time, the stronger dollar makes gold more expensive internationally.
Technical Analysis
Despite the recent weakness, TD Securities analysts said they expected near-term weakness in precious metals to remain limited and suggested that declines could attract buying interest.
Key Levels
| Prior Close (Resistance) | $4,379 |
| Session Close | $4,350 |
| Intraday Low | $4,322 |
Outlook
The immediate direction of gold remains closely linked to changes in expectations for the Federal Reserve's next policy decisions, the dollar and energy prices. With December rate-hike odds now at 88% and Kashkari reinforcing a broad-based inflation concern, gold faces a genuinely mixed backdrop of safe-haven support and monetary-policy headwinds.
Current price: Gold — $4,350 per troy ounce
What to Watch Next
- Further Fed commentary following Kashkari's remarks, particularly whether other officials echo his view that inflation is broad-based rather than energy-driven alone.
- The U.S. dollar index, now at a more than two-month high, and whether it continues extending gains from last week's rate hike.
- Whether TD Securities' view — that declines could attract buying interest — plays out, given gold's partial intraday recovery from today's low.
Bottom Line
Today's decline reflects a market looking past the December meeting itself and toward the broader inflation debate Kashkari just reopened — his comment that inflation isn't just an energy story raises the bar for what would actually ease the Fed's restrictive stance. Gold's partial recovery off the day's lows, and TD Securities' view that dips are attracting buyers, suggests the selling isn't one-directional even as the rate-hike odds climb.
Sources
- TD Securities — precious metals outlook commentary, September 2026
This article is provided for informational purposes only and does not constitute investment, financial, or trading advice.