Gold gains as oil slide cools some inflation concerns
GLD•Spot gold rose 0.5% to $4,014.49 an ounce as softer oil prices eased some inflation concerns ahead of this week’s Federal Reserve meeting. Traders priced in a 9% chance of a rate hike on Wednesday and an 80% chance in December.
1. Gold moves higher
Spot gold rose 0.5% to $4,014.49 per ounce by 0924 GMT, recovering above $4,000 after reaching $3,975 on Friday, its lowest level since July 20. U.S. gold futures for December delivery also gained 0.5%, to $4,028.40 per ounce.
2. Rates and oil in focus
A UBS analyst said some investors viewed $4,000 as a buying opportunity. He said lower oil prices were supporting gold, while expectations of further Federal Reserve rate hikes could limit gains. Higher rates increase the opportunity cost of holding non-yielding gold. Brent crude fell 2% to around $114 a barrel after reaching a six-month high last week.
3. Policy and data ahead
Traders priced in a 9% chance of a rate hike at Wednesday’s Federal Reserve meeting and an 80% chance of a December hike. Investors were also awaiting U.S. personal consumption expenditures data due October 29. The European Central Bank and Bank of Japan were expected to hold rates steady at their meetings this week.
