Gold rebounds to about £2,987 an ounce as lower oil eases rate rise fears

Gold recovered some ground on Monday, rising about 1.8 per cent to around $3,946 a troy ounce, according to Kitco's morning report. That is roughly £2,987 an ounce, or £96 a gram, on our approximate conversion before any dealer costs. It follows a brutal October: Kitco notes gold had its worst monthly performance since 2008 and briefly dipped below $3,900 late last week.

The bounce was driven by renewed diplomatic efforts between the US and Iran, which pushed oil prices lower. Cheaper oil eases inflation worries, and that in turn reduces the chance of the US Federal Reserve raising interest rates again in December. Lower Treasury yields and a softer dollar also helped. Gold pays no interest, so it tends to suffer when rate rises look likely and recover when they look less so.

The rebound may not last. Pepperstone analyst Michael Wu, quoted by Kitco, says gold still faces two headwinds: expectations of more Fed tightening and investors selling assets to raise cash. Kitco also reports silver and gold rising together after the sell-off.

For UK buyers, investment gold coins and bars are free of VAT, so the real price is spot plus dealer premium plus delivery. Compare that all-in total rather than reacting to daily swings. This is market information, not financial advice.