Gold falls to a three-month low near £3,045 an ounce as Fed rate rise bets build

Gold closed last week at about $4,024 a troy ounce, which is roughly £3,045, or around £98 a gram before dealer costs. That is our approximate conversion of the dollar price reported by ISA Bullion, which showed a 2.8 per cent fall on Friday. During Asian trading the metal briefly dropped below the psychological $4,000 mark, a fresh three-month low.

The main pressure is interest rates. ISA Bullion notes that the Federal Reserve has said there is no immediate urgency to raise rates, yet markets still price roughly an 80 per cent chance of an increase at the December meeting. Higher oil prices are keeping inflation worries alive. Because gold pays no interest, rising rate expectations tend to make it less attractive to hold.

There is some support underneath. Reports of possible US and Israeli military planning against Iran are keeping a geopolitical risk premium in place, and analysts at ISA Bullion describe gold as holding up around the $4,000 level, though momentum remains weak.

The Fed meets on 27 and 28 October, so expect choppy trading this week. For first-time UK buyers, a lower spot price is only part of the story. Investment gold is VAT free, so the all-in cost is spot plus the dealer premium plus delivery. Comparing that total is what matters. This is market information, not financial advice.