Gold falls as higher oil stokes inflation fears ahead of US midterms
GLD•Spot gold fell 1.1% to $3,903.48 per ounce, while U.S. gold futures dropped 1.4% to $3,913.80. Higher oil prices fueled inflation concerns, and traders priced in a 76% chance of a Federal Reserve rate hike in December.
1. Gold prices fall
Spot gold slipped 1.1% to $3,903.48 per ounce by 1202 GMT, after gaining about 2% in the previous session. U.S. gold futures for December delivery fell 1.4% to $3,913.80 per ounce.
2. Oil and rate concerns
Oil prices rebounded after a steep selloff, as an Iranian official said Tehran and Washington remained far from a deal to end the war and the United States struck Iran's Qeshm Island. Commodity strategist Nitesh Shah said higher oil can raise inflation pressures and rate expectations, which is negative for gold. Traders saw a 76% chance of a Federal Reserve rate hike in December.
3. Investment outlook revised
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 3.3%, platinum declined 1.9% and palladium dropped 3.1%.
