Gold rises as cheaper oil lifts hopes for a Fed pause
Dubai: Gold inched up on Monday, October 12, as falling oil prices calmed worries about inflation. Traders now see a better chance that the US Federal Reserve will hold off on more interest rate hikes. Globally bullion is trading slightly lower at $4,190.15 after it breached the $4200 mark in early morning trade on Monday. In the UAE, prices have stayed stable through the weekend. 24-karat gold…
Gold prices in Dubai edged higher on Monday, October 12, as falling oil prices eased concerns about inflation. The metal was trading near $4,190.15 per ounce after breaking above the $4,200 level early Monday. In the UAE, gold prices remained relatively flat over the weekend.
24-karat gold held above Dh500, priced at Dh505.50 per ounce, while 22-karat and 18-karat were at Dh468 and Dh384.75 respectively. 14-karat gold ticked upward towards Dh300.
Oil prices were the primary catalyst for the move. Brent crude slipped to around $103 a barrel. Traders anticipate reduced supply-side pressures and lower costs following President Donald Trump's announcement that Russia and Ukraine had reached an energy ceasefire. However, specifics of the agreement remain unclear.
Bond markets provided additional support to commodities. Yields on 30-year US Treasuries declined on Friday, offering some relief. The US debt markets were closed on Monday for a holiday. Investors are also adding positions in gold-backed exchange-traded funds. China's central bank has been increasing its gold purchases at a faster pace.
Despite these factors, gold remains significantly below its previous levels, having lost about a fifth of its value since the start of the US-Iran conflict in late February. Disruptions to Middle East energy supplies have kept inflation risks elevated, and some central banks have raised interest rates in response. Higher rates are detrimental to gold, which does not generate income.
Investors will be looking for clearer signals in the coming week. US inflation data is scheduled for release on Wednesday, October 14. Fed Chair Kevin Warsh is set to participate in a discussion at the International Monetary Fund's annual meeting in Bangkok on Thursday, October 15. Fed Governor Christopher Waller and Cleveland Fed President Beth Hammack will also speak.
Most importantly, the developments in the Middle East will be closely watched, as further escalation of tensions between Saudi Arabia and the Houthis could introduce additional uncertainty.
Written by urgent.news from Gulf News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
