Gold prices rose on Monday as softer oil prices provided some relief to inflation concerns, while investors awaited signals from the Federal Reserve on interest rate decisions later this year. Spot gold increased 0.3% to $4,175.60 per ounce by 0259 GMT. US gold futures for December delivery climbed 0.4% to $4,196.40.
Tim Waterer, chief market analyst at KCM Trade, linked gold’s modest gain to the drop in oil prices. “The metal is responding positively to the softer tone in oil prices from an inflation standpoint,” he said. Waterer noted that a sustained decline in oil or a clearer fall in yields would be more constructive for gold, as both factors would ease inflation and rate concerns.
Oil prices slipped after US President Donald Trump waived sanctions and tariffs on Russia that could increase Russian fuel exports. This development came amid rising US import prices in September, which climbed more than expected due to higher costs for energy products and other goods. The figures added to evidence of inflation pressures persisting as the Middle East conflict continues.
Investors are now focused on the Federal Open Market Committee meeting on US interest rates and the upcoming Personal Consumption Expenditures (PCE) data. The Fed uses PCE price measures to track its 2% inflation target. According to the CME’s FedWatch Tool, traders assign a 16% chance of a rate hike this month and a 92% chance of an increase in December.
Gold usually acts as a hedge against inflation, but higher interest rates reduce its appeal because it does not produce yield. This dynamic has kept gold prices cautious despite inflationary pressures.
The International Monetary Fund reported on Friday that the European Central Bank is expected to raise interest rates by at least 25 basis points once more this year to combat inflation.
Other metals also moved higher on Monday. Spot silver increased 0.9% to $57.54 per ounce, platinum gained 0.7% to $1,642.29, and palladium jumped 1.5% to $1,129.13.
The sequence of softer oil prices, rising inflation data, and central bank decisions continues to shape the gold market. Traders remain watchful for clearer signals on monetary policy, especially as the Fed’s December meeting approaches.
According to Joy Online.
