Gold falls as higher oil stokes inflation fears ahead of US midterms
GLD•Spot gold fell 1.1% to $3,904.69 per ounce as higher oil prices fueled inflation concerns; traders priced in a 75% chance of a Federal Reserve rate hike in December.
1. Gold prices decline
Spot gold fell 1.1% to $3,904.69 per ounce by 1002 GMT, after gaining about 2% in the previous session. US gold futures for December delivery dropped 1.4% to $3,914.70.
2. Oil and rate concerns
Oil rose more than $1 after the United States struck Iran’s Qeshm Island and an Iranian official said a deal to end the war was far off, raising concerns about energy supplies. Commodity strategist Nitesh Shah said higher oil prices can lift inflation and rate expectations, which is negative for gold. Traders saw a 75% chance of a Federal Reserve rate hike in December.
3. Investment forecast cut
The World Gold Council cut its forecast for growth in gold investment this year to 200 metric tons from 400 tons, citing weaker appetite for bars and coins, while raising its estimate for central bank purchases. Spot silver fell 3.4%, platinum declined 2.1% and palladium dropped 2.9%.
