Gold prices declined during Tuesday’s trading session, extending losses for a third consecutive session as rising oil prices renewed inflation concerns and weighed on the outlook for US monetary policy ahead of the upcoming Federal Reserve meeting.
Spot gold fell 0.2% to $4,131.62 per ounce, while US gold futures for December delivery declined by the same percentage to $4,150.15. The precious metal had lost 0.6% in the previous session following a weekly decline.
Investors are currently assessing the risks associated with higher energy costs, which could keep inflation elevated and prompt the Federal Reserve to maintain restrictive monetary policy for longer. Gold, which offers no interest income, typically becomes less attractive when interest rates and bond yields rise, as the opportunity cost of holding the metal increases.
Meanwhile, Brent crude prices remained above $109 per barrel after reaching a five month high of $110.70, as concerns over Middle Eastern oil supplies continued to influence the market. These concerns followed attacks by the Houthi group on Saudi infrastructure and critical facilities, including a site operated by Saudi Aramco.
Market attention is now turning to the upcoming Federal Reserve meeting for clearer guidance on the future direction of interest rates. Investors widely expect the Fed to leave rates unchanged, while also monitoring the release of the Personal Consumption Expenditures Price Index to assess underlying inflationary pressures and whether further monetary tightening may be necessary.
Among other precious metals, spot silver rose 0.6% to $57.44 per ounce, while platinum gained 0.3% to reach $1,653.65 per ounce.
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