Why Falling Global Oil Prices Are Pushing Gold Higher

Gold prices strengthened in trading on Monday (19 October 2026), as falling oil prices lent support to the precious metal. Investors were also assessing the US Federal Reserve’s interest-rate outlook and inflation developments in the country.

Reuters reported that spot gold rose 0.4 per cent to US$4,182.30 an ounce, equivalent to about Rp75.28 million at an exchange rate of Rp18,000 per US dollar. US gold futures for December delivery gained 0.5 per cent to US$4,203.50 an ounce, or around Rp75.66 million.

The move came as markets weighed how changing energy prices could affect inflation and the likelihood of adjustments to US monetary policy. Tim Waterer, chief market analyst at KCM Trade, said weaker oil prices were supporting gold because they could ease inflationary pressures.

“Gold posted a moderate gain at the start of the week. The precious metal responded positively to weaker oil prices in terms of their impact on inflation,” Waterer said.

He added that a more sustained fall in oil prices, or a decline in US government bond yields, could support gold in the near term.

“In the short term, a more sustained drop in oil prices or a clearer decline in US government bond yields would be the strongest supportive factors, as both could ease concerns about inflation and interest rates,” he said.

Oil prices weakened after US President Donald Trump granted exemptions from sanctions and tariffs on Russia. The policy could pave the way for increased Russian fuel exports.

Meanwhile, US import prices rose more than expected in September, driven by higher costs for energy products and a range of other goods, keeping inflationary pressures in focus for market participants.

Investors are now looking ahead to next week’s Federal Open Market Committee (FOMC) meeting on US interest rates and the release of personal consumption expenditures (PCE) data.