Gold prices moved slightly higher on Tuesday as oil prices eased, while investors turned their attention to upcoming US inflation data for clues on the Federal Reserve’s next interest-rate move.
October 13 — Gold prices edged higher in early trade on Tuesday as easing oil prices offered some support, while investors awaited key US inflation data that could shape expectations for the Federal Reserve’s interest-rate path.
Spot gold rose 0.4% to $4,185.69 per ounce by 0356 GMT after touching a one-week high on Monday. US gold futures for December delivery were also up 0.5% at $4,209.90.
Oil prices declined and were heading for their first fall in nearly a week. The recent rise in crude prices, driven by tensions in the Middle East, has fuelled inflation concerns and strengthened expectations that central banks may need to keep monetary policy restrictive for longer.
Gold is traditionally seen as a hedge against inflation, but higher interest rates can reduce its appeal because the metal does not offer any yield. This means upcoming US inflation numbers could play an important role in determining the near-term direction of gold prices.
Investors are now waiting for the US Consumer Price Index report on Wednesday, followed by the Producer Price Index data on Thursday. Analysts said stronger-than-expected inflation, particularly in the core CPI reading, could revive expectations of an October rate hike and put fresh pressure on gold.
According to CME’s FedWatch tool, traders currently see only a 19% chance of a Federal Reserve rate hike this month, but are pricing in an 85% probability of an increase in December.
Meanwhile, geopolitical risks remain elevated. Saudi Arabia said it was facing a fresh barrage of incoming fire, while Riyadh airport remained closed following a deadly missile strike on a departure terminal claimed by Yemen’s Iran-aligned Houthis.
Other precious metals also moved higher. Spot silver gained 0.2% to $60.42 an ounce, platinum rose 0.7% to $1,697.40, while palladium advanced 0.1% to $1,144.30.
For gold, the immediate focus remains on US inflation data and how it affects expectations for Federal Reserve policy, while movements in oil prices and geopolitical developments are likely to remain key drivers.
