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Gold prices rose in global markets on Monday (October 12) as the US dollar weakened slightly and oil prices declined. Investors are also awaiting US inflation data this week for clues about the Federal Reserve’s monetary policy decisions.
Spot gold rose 0.3% to $4,206 per ounce at 8:53am Bangladesh time on Monday, Reuters reported.
Earlier in the session, prices reached their highest level since October 2. US gold futures for December delivery also gained 0.3% to $4,230 per ounce.
Tim Waterer, chief market analyst at KCM Trade, said an energy deal announced by US President Donald Trump for a ceasefire in the Russia-Ukraine war, along with a slight decline in the dollar, had created room for gold prices to rise.
“Lower oil prices have eased immediate market concerns over inflation and interest rates, which is positive for gold in terms of investment returns,” he said.
On Sunday, Trump unexpectedly announced an energy ceasefire between Russia and Ukraine, saying it would take effect immediately. However, Ukrainian President Volodymyr Zelensky said he was still waiting for details of the agreement.
Oil prices fell amid expectations of increased supplies from Russia.
Gold is generally considered a hedge against inflation. However, higher interest rates tend to reduce the appeal of the precious metal, which does not pay interest or dividends.
Market participants are now awaiting the US Consumer Price Index (CPI) report, due on Wednesday. The Producer Price Index (PPI) and retail sales data are scheduled for release on Thursday.
According to CME’s FedWatch tool, traders see a 17% chance of an interest rate hike in October and an 86% probability of an increase by December.
Meanwhile, US consumer confidence fell further in early October as the Middle East conflict drove up the cost of living, worsening public sentiment about the economy.
Among other precious metals, spot silver rose 0.5% to $61.12 per ounce. Platinum gained 1% to $1,704.70, while palladium climbed 1.2% to $1,161.81 per ounce.
