Gold drops 0.2% and remains near highest level since October 2

Spot gold fell 0.2% to $4,185.13 per ounce during Monday's session after touching its highest level since October 2, while markets await US inflation data as a main driver for price trends.

According to the "The Edge Malaysia" website, citing Reuters, spot gold traded at $4,185.13 per ounce, down 0.2% on the day after touching its highest level since October 2, while US December futures dropped 0.2% to $4,209.70.

Calculations indicated a 19% probability of an interest rate hike in October and 84% by December, according to the CME FedWatch Tool, while the metal benefited from calmness in energy markets following reports of an energy truce between Russia and Ukraine.

Rhona O'Connell from StoneX, in a comment published on Investing.com, said that bargain hunting led the previous session's recovery from a two-month low, describing the level around $4,000 as a support zone in the making, while September inflation data is due on Wednesday ahead of the Fed meeting scheduled for October 27 and 28.

What do these terms mean?

Futures contracts: Agreements to buy or sell a commodity at a predetermined price with delivery at a later date, and they are the most traded instrument in metals.

CME FedWatch Tool: A tool that displays traders' expectations for the probabilities of changes in US interest rates at each meeting, updated immediately upon the release of economic data.

Support zone: A price level where a decline stops due to a large number of buyers, and repeated demand at this level indicates the strength and establishment of the zone.