Gold: Oil-driven rate repricing weighs on bullion – ING
ING commodities strategists Warren Patterson and Ewa Manthey say Gold has slipped to a two‑week low below $4,300/oz as higher Oil prices revive concerns over US inflation and limit near‑term Federal Reserve easing.
Gold prices slipped to a two-week low below $4,300 per ounce, as higher oil prices reignite concerns about potential US inflation and constrain near-term Federal Reserve easing, according to ING commodities strategists Warren Patterson and Ewa Manthey. Recent profit-taking in the market has taken its toll, but medium-term support from lower rate expectations, central bank purchases, and persisting geopolitical uncertainty are seen as providing a floor for gold prices.
The recent rally in gold, which saw the precious metal gain nearly 10% in August and register its largest monthly increase since January, has been driven by safe-haven demand and concerns over US fiscal sustainability. However, the decline is expected to be short-lived, with any pullbacks likely to trigger renewed buying interest.
Rising energy costs could exacerbate inflationary pressures and limit the Federal Reserve's ability to ease rates in the near term, putting downward pressure on non-yielding assets like gold.
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