Gold plummets: Hits 8-week low

Gold in global markets began the new week with significant selling pressure. In early trading, spot gold fell to $4,194, marking its lowest level since August 5. Thus, the yellow metal tested an 8-week low.

As of 06:00 TSI, spot gold was trading at $4,197, with a daily decline of around 2 percent. The weak outlook observed last week, which saw gold close at $4,284 with a 2.13 percent loss, has carried over into the new week.

Domestically, gram gold also declined in parallel with global pricing. In the spot market, the price of gram gold on September 28, 2026, started the day at 6,606 TL. Gram gold had closed on Friday at the 6,739 TL level.

The pressure on gold is being driven by high oil prices, the rise in US bond yields, the strong performance of the dollar index, and expectations of interest rate hikes by the US Federal Reserve (FED). Gold, which does not provide interest income, can experience a decline in investor interest during periods when bond yields rise and the dollar strengthens.

Markets are also closely monitoring the lack of concrete results from talks between the US and Iran. Following US President Donald Trump's rejection of Iran's latest proposal for the reopening of the Strait of Hormuz, Brent crude oil futures headed above $105 in early trading this week. The rise in energy prices is also affecting interest rate pricing through inflation expectations.

The yield on the 10-year US Treasury bond started the week near the 5.20 percent level. While the high trend in long-term interest rates creates pressure on gold, Cleveland FED President Beth Hammack stated that the rise in long-term yields is driven by a strong growth outlook, concerns regarding public debt, and expectations of additional interest rate hikes.

MARKETS EYE US DATA

The dollar index remaining above the 101 level is also cited as a factor supporting the decline in gold. A strong dollar makes gold more expensive for investors trading in other currencies. The expectation that the FED may maintain its high-interest-rate policy for a longer period also provides support to the dollar.

Statements from the FED front have pushed market interest rate expectations higher. Richmond FED President Tom Barkin pointed to the strength in economic activity and the impact of demand on inflation, while FED Governor Michael Barr signaled that additional interest rate hikes might be necessary due to rising inflationary pressures. Chicago FED President Austan Goolsbee warned that high energy prices could make inflation more persistent.

Following the FED's decision at its September 16 meeting to raise the policy rate by 25 basis points to the 3.75-4.00 percent range, expectations for the October meeting have also strengthened. According to CME FEDWatch data, the probability of a new interest rate hike in October is priced at approximately 65 percent.

This week, the market's focus will be on data coming from the US. The Personal Consumption Expenditures (PCE) Price Index and core PCE, which the FED monitors as an inflation indicator, will be announced on Wednesday, September 30. The most critical data of the week will be the non-farm payrolls report to be released on Friday, October 2. The data, which will be announced along with the unemployment rate and average hourly earnings, could be decisive in expectations regarding the interest rate decision in October.