Gold eases as oil-driven inflation worries weigh
GLD•Spot gold fell 0.51% to $4,118.76 an ounce as higher oil prices fuelled inflation concerns. Traders awaited next week’s Federal Reserve decision and U.S. PCE data, while markets priced in a 92% chance of a December rate hike.
1. Oil weighs on gold
Spot gold fell 0.51% to $4,118.76 per ounce by 0859 a.m. EDT, while U.S. gold futures for December delivery dropped 0.55% to $4,137.20. Brent crude hovered around a five-month high as traders priced in geopolitical risks, including Houthi attacks on Saudi infrastructure and reported vessel attacks in the Gulf.
2. Rate outlook in focus
Investors awaited next week’s Federal Reserve meeting and U.S. Personal Consumption Expenditures data for clues on inflation and interest rates. Traders largely expected the Fed to leave rates unchanged at its October 27-28 meeting, while pricing in a 92% chance of a December hike. Gold was down around 26.4% from its January record high of $5,594.82.
3. Other metals mixed
Silver was steady at $57.08 per ounce, platinum fell 0.29% to $1,635.48, and palladium dropped 1.54% to $1,102.45. Gold is traditionally viewed as an inflation hedge, but higher interest rates can weigh on demand for the non-yielding asset.
