Gold and silver prices moved higher on Monday, October 5, 2026, as softer US labor data cooled expectations for a Federal Reserve rate hike in October. Investors are now turning their attention to the upcoming Reserve Bank of India policy meeting and key global economic reports.
Gold and silver prices opened the week on a positive note, with spot gold climbing to approximately $4,158 per ounce on Monday, October 5, 2026. Silver also saw a recovery, rising 1.7% in early trade. This comeback follows a difficult previous week, where bullion prices faced sharp downward pressure from a stronger US dollar and rising Treasury yields, which typically make non-yielding assets like precious metals less attractive to investors.
The primary driver for this recovery is a shift in market sentiment regarding US interest rates. Recent labor market data from the US came in softer than analysts expected. Consequently, the probability of the Federal Reserve hiking rates in October has dropped to roughly 22%, significantly lower than the 64% chance that the market was pricing in just one week ago. Because gold does not pay interest, lower interest rate expectations generally help support its price.
In India, market participants are bracing for a critical period ahead. The Reserve Bank of India is scheduled to hold a monetary policy meeting, and investors are looking for guidance on interest rates and inflation trends. For the domestic physical market, demand often remains sensitive to price stability. After the volatility seen last week, many physical buyers appear to be waiting for more consistent price signals before committing to purchases, especially with the festive season approaching.
While the immediate pressure from rate hike bets has eased, market risks remain. Ongoing tensions between the US and Iran continue to create geopolitical uncertainty. While gold is often viewed as a safe-haven asset during times of instability, it also faces pressure from the potential for energy market disruptions. Additionally, even though the expectation for an October rate hike has cooled, the Federal Reserve’s broader interest rate cycle remains a significant factor that could cap long-term gains for bullion.
Investors will likely continue to track incoming economic reports, including US trade figures and services PMI data, to gauge the health of the global economy. The inverse relationship between the US dollar and bullion is expected to continue influencing price action, meaning market participants should prepare for continued volatility in the near term.