Precious Metal

Gold Climbs Back Above $4,000 as Oil Eases Before Fed Decision; Fresnillo Silver Output Drops 11.5%

Spot gold recovered above $4,000 an ounce Monday as lower crude prices eased inflation worries before the Fed meeting, while Heraeus flagged an 11.5% drop in Fresnillo's nine-month silver output.

Oct 26, 2026 - 12:14

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Gold climbed back above $4,000 an ounce on Monday, October 26, 2026, as a drop in crude oil prices eased some inflation concerns heading into this week's Federal Reserve policy meeting. Spot gold was trading near $4,014.49 an ounce, up 0.50%, in early U.S. trading, while spot silver was near $53.99, up 0.20%, according to the Kitco AM Report.

The recovery follows a sharp selloff last week. Kitco said gold fell to $3,975.00 on Friday and recorded its steepest weekly decline in more than four months.

Oil, yields and the Fed

Kitco linked Monday's move to lower crude prices, which declined roughly 2% in the morning as diplomatic activity reduced immediate concern about another interruption to Gulf energy supplies. Brent retreated toward $114 a barrel and WTI traded near $101, according to the report. Senior delegations from Saudi Arabia, Pakistan and Turkey were expected in Tehran for talks, Kitco said, though it added that no confirmed breakthrough had emerged between Washington and Tehran.

Interest rate futures indicate about a 90% probability that the Fed will leave its benchmark rate at 3.75% to 4.00% when its October 27-28 meeting concludes on Wednesday, Kitco reported. Traders still assign roughly an 80% probability to at least one 25-basis-point increase by December. The benchmark 10-year Treasury yield was near 4.99% on Monday morning, down from a recent high of 5.31%, according to Kitco.

Recent data have kept inflation in focus. Kitco noted that September consumer prices rose 0.6% on the month and 3.7% from a year earlier, and producer prices rose 1.3% and 6.3%, respectively. The final October University of Michigan consumer sentiment index was 48.0, with year-ahead inflation expectations at 4.7%.

Heraeus: gold caught between two forces

Precious metals analysts at Heraeus said gold is trapped between rising oil prices and falling Treasury yields, according to a Kitco News report on their latest update. "For gold, elevated near-term oil prices continue to raise inflation risks and keep a December Fed rate hike firmly priced in, offsetting the traditional safe-haven support from geopolitical uncertainty," the analysts wrote. They noted that oil for delivery in a year's time was trading around $89 a barrel, pointing to a significant short-term risk premium.

The analysts said the 10-year yield had retreated toward 5.0% from around 5.35% earlier in October, and that the inflation-protected TIPS real yield had fallen from above 2.9% to nearly 2.6%. "Lower yields reduce the opportunity cost of holding gold, but Treasuries are also competing directly for safe-haven flows at yields that remain historically high while the dollar remains elevated," they wrote.

Fresnillo's silver production slides

Heraeus also highlighted weaker output at Fresnillo, which Kitco describes as the world's largest primary silver miner. Attributable silver production in the third quarter totaled 10.3 million ounces, down 5.5% from 10.9 million ounces in the second quarter and 11.6% from 11.7 million ounces a year earlier, the analysts said. Lower grades at the Juanicipio, Saucito and San JuliÃ¡n operations contributed to the decline, and the year-on-year comparison was also affected by the end of the Silverstream contribution. Attributable output at Juanicipio fell 26% year on year to 1.8 million ounces, while the Fresnillo mine's production rose 5% to 2.5 million ounces.

Over the first nine months of 2026, the company produced 32.4 million ounces of silver, down 11.5% from the same period a year earlier, according to the report. With full-year guidance unchanged at 42.0 million to 46.5 million ounces, Fresnillo needs 9.6 million ounces in the fourth quarter to reach the low end of the range, Heraeus said. At that level, its output would equal around 5% of global mined silver supply, which totaled 846.6 million ounces in 2025.

Silver below $55

Heraeus noted that silver had dropped below $55 an ounce, breaching its July lows, and was more than 20% below its late-August rebound high near $70. The analysts identified $50 as the next psychological support level if the move below $55 is sustained. Silver gave back early gains on Monday morning, with spot last trading at $53.77, down 0.24%, Kitco reported.

What is on the calendar

Kitco listed September durable goods orders, consumer confidence and new-home sales for Tuesday; the Fed's rate decision at 2 p.m. EDT Wednesday, followed by Fed Chair Kevin Warsh's news conference at 2:30 p.m.; and on Thursday, the advance estimate of third-quarter GDP, September personal consumption expenditures inflation and weekly jobless claims. The Fed is currently in its pre-meeting communications blackout.

Prices quoted are intraday spot levels from Monday morning and are subject to change.