Gold price rises as investors take advantage of the price drop

Gold prices rose on Monday, surpassing $3,900 per ounce. Demand for the precious metal began to recover after gold recorded its sharpest monthly decline since 2008 in October. The price increase was also supported by a weakening of the US dollar.

According to Investing.com, as of 09:09 Tbilisi time, spot gold rose 0.7% to reach $3,902.81 per ounce, while US gold futures gained 0.3% to $3,911.77. Silver prices rose 2.6% to $50.40 per ounce. Meanwhile, platinum fell 0.2%, and spot palladium prices rose 0.1%. The US dollar index declined 0.4% to 101.45 points.

Gold fell 3.7% in the previous trading session, pushing its price down to a one-year low. In October, the metal posted its worst performance since 2008, though the price decline has drawn in investors pursuing a "buy-the-dip" strategy in the market.

Geopolitical Risks and Stock Market Volatility

The outlook for gold prices continues to be influenced by the situation in the Middle East. According to US Secretary of State Marco Rubio, Donald Trump prefers to resolve the conflict with Iran through diplomatic means, which has somewhat reduced the risks of energy supply disruptions and inflationary pressure.

However, the threat of military escalation remains. Trump has repeatedly warned Iran that Washington could resume military strikes after the midterm elections. Tehran, for its part, has threatened an even larger-scale response.

A further risk for gold comes from the decline in technology stocks. Doubts about the effectiveness of investments in the artificial intelligence sector have triggered a wave of selling in stock markets. To cover losses, some investors are also selling gold, creating additional pressure on the precious metal.

According to ANZ analysts, high interest rates and the resilience of the US economy are limiting gold's price growth. Nevertheless, investment demand remains strong: in September, gold-backed exchange-traded funds attracted more than 50 tonnes of the metal, even as US Treasury yields exceeded 5%.

ANZ forecasts that high yields and a potential strengthening of the dollar will hold back gold's price growth in the short term. Analysts suggest the price may stabilize around the $4,000 mark or remain below it for some time before a more sustained recovery begins.