Gold slips as Mideast attacks fan inflation concerns; US midterms in focus
GLD•Spot gold fell 0.9% to $3,913.62 an ounce as higher oil prices fanned inflation concerns and reinforced expectations of higher interest rates. Traders priced in a 73% chance of a Federal Reserve rate hike in December while awaiting US midterm election results.
1. Gold prices ease
Spot gold fell 0.9% to $3,913.62 per ounce by 0653 GMT, after rising more than 2% on Monday following a drop to a one-year low on Friday. US December gold futures fell 1.2% to $3,923.00.
2. Oil and rates weigh
Oil prices edged higher after a report that the United States had struck Iran's Qeshm Island, raising fears of escalation and prolonged disruption to Middle East oil supplies. Higher energy prices strengthened expectations that the Federal Reserve will keep rates higher for longer; traders saw a 73% chance of a December rate hike.
3. Election and demand outlook
Investors awaited US midterm election results for clues on policy and market sentiment. Tim Waterer of KCM Trade said gold may need a convincing move above $4,000 to turn higher. The World Gold Council said ETF inflows, physical investment demand and central bank purchases should support investment demand for gold.
