Gold edges lower as traders weigh oil prices and Fed rate path
Several Fed policymakers are due to speak this week after voting last week to hike rates
Gold prices dipped as traders considered the potential impact of additional US Federal Reserve interest rate hikes, while oil prices continued their decline. Bullion fell by up to 1.3% to under US$4,325 per ounce. Several Fed policymakers are scheduled to address the public this week after enforcing a unanimous rate increase last week.
Higher interest rates generally render gold less appealing to investors, as it does not yield interest. Chicago Fed president Austan Goolsbee cautioned that the US central bank must address persistent and severe supply shocks, which could lead to economic hardships. On Monday, he noted at a London event that supply shocks have become more frequent, causing higher and longer-lasting inflation increases.
Meanwhile, the London bullion market auction witnessed intense selling, with four times more gold offered for sale than buyers desired, causing prices to fall. Following the last rate increase, aimed at curbing inflation that remains above the 2% target for over five years, Minneapolis Fed president Neel Kashkari stated that inflation continues to be too high and pressures have escalated beyond the Iran war's oil-price shock.
New York Fed president John Williams is set to speak on Tuesday at the 2026 US Treasury Market Conference. Analyst Justin Lin from Global X ETFs stated that gold has "no real narrative and relatively few fresh catalysts in the near term" due to the widespread shift of focus from the Fed independence narrative after Warsh's hike and broadly expected forward guidance on rates.
Oil prices fell below US$100 per barrel on Monday, with Brent crude anticipated to experience the longest decline since June, as reduced flows through the Strait of Hormuz and diplomatic efforts around the US-Iran war helped lower tensions. Spot gold was down 0.7% at US$4,349.96 per ounce by 12:37 PM in New York. Silver remained relatively unchanged at US$66.22 per ounce.
Platinum and palladium saw slight increases. The Bloomberg Dollar Spot Index, measuring the US currency, rose by 0.1%.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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