Gold slips on oil-fuelled inflation fears ahead of Fed meeting

Gold prices declined on Wednesday as higher oil prices heightened inflation concerns before the Federal Reserve's policy announcement. The precious metal slipped 0.7% to $4,030.20 per ounce by 0602 GMT, with US gold futures for December delivery falling 0.8% to $4,043.00. Analyst Soni Kumari noted that gold's movements are influenced by expectations of interest rate changes and inflation risks due to increased energy prices.

The Federal Reserve's caution ahead of its meeting, scheduled for 1800 GMT, poses a short-term challenge for gold. The recent surge in oil prices, triggered by an attack on a Saudi Arabian refinery, amplified worries about supply disruptions from the key exporter. As markets anticipate the Fed's decision and upcoming inflation data on Thursday, traders are cautiously pricing in an 84% chance of a December rate hike, according to the CME's FedWatch Tool.

Despite forecasts of persistent high inflation in the global economy, analysts anticipate a recovery in 2027. Platinum and palladium prices have also been revised downward in a recent Reuters survey.