Gold falls to more than two-month low as oil-fuelled inflation fears weigh
GLD•Spot gold fell 2.1% to $4,055.69 an ounce, its lowest level in more than two months, as rising oil prices fueled inflation concerns and expectations that interest rates could stay elevated. Investors also looked ahead to next week’s Federal Reserve meeting and U.S. PCE data.
1. Gold hits two-month low
Spot gold fell 2.1% to $4,055.69 per ounce by 11:25 a.m. EDT, after reaching its lowest level since August 4 earlier in the session. U.S. gold futures for December delivery dropped 1.9% to $4,071.40 per ounce.
2. Oil stokes inflation concerns
Oil prices climbed about 2% to a five-month high after Houthi attacks in Saudi Arabia raised concerns about energy supply disruptions. Higher energy prices added to inflation concerns and expectations that interest rates could remain elevated; higher rates reduce the appeal of non-yielding gold. Traders priced in a 78% likelihood of a December rate increase, while the Fed was still expected to hold rates at its October 27-28 meeting.
3. Markets await data
U.S. Personal Consumption Expenditures data due October 29 could offer fresh clues on the path of interest rates. Silver fell 4.6% to $55.28 per ounce, while platinum and palladium also declined.
