Gold prices continue to consolidate rather than enter a bear market, according to Matthew Piggott, director of gold and silver at Metals Focus. In an interview with Kitco.com, Piggott noted that gold's inability to sustain a rally since its correction earlier this year reflects competition for investment capital rather than a fundamental deterioration in the metal's long-term outlook.
Piggott highlighted that institutional investors have consistently returned to the gold market when prices have fallen toward $4,000/oz, establishing a floor. Central banks have also played a significant role in supporting gold prices. He emphasized that the underlying economic and geopolitical factors that drove gold's rally in 2025 remain intact, with growing government debt and fiscal uncertainty strengthening gold's longer-term investment case.
Large government deficits, rising debt-servicing costs, and uncertainty surrounding U.S. policy should continue encouraging diversification away from traditional dollar-denominated assets, Piggott said. Gold futures edged lower Monday as the U.S. dollar firmed, yields rose, and oil prices trimmed losses early in the day.
Saxo Bank analysts noted that the market remains caught in a tug of war between short-term selling pressure from macro-focused traders and demand from less interest-rate-sensitive investors seeking a safe haven amid multiple geopolitical and fiscal tensions. Investors are also awaiting next week's data on U.S. Personal Consumption Expenditures, the Federal Reserve's preferred gauge of inflation.
Traders now see an 82.8% chance that the Fed will leave rates unchanged this month, while expectations for a hike in December remain at 90%, according to the CME's FedWatch tool. Front-month Comex gold for October delivery slipped 0.5% to $4,139.00/oz, and front-month Comex October silver lost two cents to $56.974/oz.