Gold recovers part of Friday's losses near $3,900, but Fed tightening bets limit the rebound

According to FXStreet, XAU/USD began the week higher. It snapped a two-day losing streak and won back some of Friday's sharp drop to sub-$3,900 levels, which had taken the metal to its lowest point since October 2025.

Markets still assign a high probability to additional Fed tightening while oil prices feed inflation worries. Higher rates raise the opportunity cost of holding gold, which pays no yield, and this is the main factor capping the bounce. US-Iran diplomacy provides some support for the metal.

Other reports pointed to a retreat in oil prices that eased inflation concerns. Moneycontrol described gold climbing back above $3,900 and silver rising above $50. Another outlet cited a 3.6% slide before gold stabilised. Separate coverage said outflows from the SPDR Gold Shares (GLD) ETF had increased and that gold had broken below a key support level ahead of the US nonfarm payrolls report. The sources give no figures for the outflows.

Existing forecasts for gold are close to neutral across horizons. They put the odds of a rise at roughly even over 1 to 90 days and slightly higher over a year.