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Gold prices fell for the fourth consecutive day in the global market, Reuters reported, as rising oil prices heightened inflation concerns and investors turned their attention to next week’s Federal Reserve policy meeting.
At 9:15am Bangladesh time on Wednesday (October 21), spot gold prices fell 0.2% to $4,118.18 an ounce. Meanwhile, US gold futures for December delivery declined 0.2% to $4,136.20 an ounce.
Bass Kooijman, chief executive and asset manager at DHF Capital SA, said gold prices could face further pressure as crude oil prices begin rising again. This could sustain inflationary pressures and strengthen expectations of tighter monetary policy, he added.
Oil prices rose in global markets on Wednesday amid concerns over supply disruptions in the Middle East. Traders are worried about risks to shipping in the Red Sea and the possibility of attacks on Saudi Arabia’s energy infrastructure.
However, Ilya Spivak, head of global macro at Tastylive, said gold prices could rebound if market expectations change. According to him, gold could gain if some of the interest rate hikes expected next year are no longer priced into the market or become less likely.
Nearly all economists surveyed by Reuters expect the Federal Reserve to leave interest rates unchanged this month. However, the central bank could raise rates again in December. Although persistent inflation may warrant tighter policy, policymakers could choose to monitor developments for now.
According to CME’s FedWatch tool, markets see just a 16% chance of a rate hike at the Fed’s October 27–28 meeting. However, nearly 90% of market participants expect an interest rate increase in December.
