Gold slips as Mideast attacks fan inflation concerns; US midterms in focus
GLD•Spot gold fell 1% to $3,908.49 an ounce as higher oil prices raised inflation concerns and reinforced expectations of higher interest rates. Traders saw a 75% chance of a Federal Reserve rate hike in December, while investors awaited US midterm election results.
1. Gold prices retreat
Spot gold slipped 1% to $3,908.49 per ounce by 0830 GMT, after rising more than 2% on Monday. US gold futures for December delivery fell 1.3% to $3,917.90.
2. Oil and rates weigh
Oil rose more than $1 after a report that the United States had struck Iran’s Qeshm Island, raising concerns about escalation and prolonged disruption to Middle East oil supplies. Higher energy prices increased expectations that the Federal Reserve will keep rates higher for longer; traders priced in a 75% chance of a December rate hike. The World Gold Council lowered 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.
