Gold prices rebounded on Monday after a sharp selloff last week, though the prospect of further Federal Reserve interest rate hikes continues to weigh on the market. Analysts at Heraeus noted that while the Fed left rates unchanged last week, future hikes remain likely. The gold price initially dropped during Kevin Warsh’s press conference but recovered as the dollar and Treasury yields eased. However, strong economic data, including a 3.6% year-on-year PCE price index and a 3.4% annualized GDP growth in Q3, reinforced expectations of a December rate hike, with markets pricing in a 76% probability of a 25 basis point increase.
Heraeus suggested that the slide below $4,000 per ounce could attract buyers, similar to the response seen in June and July when Chinese demand helped stabilize prices. Non-monetary gold imports in China rose to 173 tonnes in June, the highest since March 2024, while the People’s Bank of China increased its purchases. However, it remains unclear whether Chinese demand will rebound this time, as the Shanghai premium remains modest and official buying data is pending.
Meanwhile, mining giant Newmont reported stable gold production in Q3, with attributable production totaling 1.30 million ounces, 1% higher quarter-on-quarter but 8% below the same period last year. Newmont expects Q4 to be its strongest quarter, keeping full-year output on track to meet guidance of 5.26 million ounces. Spot gold last traded at $3,962.60 per ounce, up 2.26% on the day.
Turning to silver, Heraeus analysts highlighted that India is easing its import regime, which is expected to boost silver consumption over the next six months. India has issued permits for around 6,500 tonnes of silver imports, potentially removing a major constraint on physical inflows. The allocation is significant, as it equals approximately 209 million ounces, nearly 90% of the 232 million ounces India imported in 2025. The timing aligns with the upcoming Diwali festival, which typically sees a surge in demand. Silver prices also surged on Monday, last trading at $50.987 per ounce, up 3.77% on the day.