Gold Drops on Inflation Concerns
Gold prices dropped toward $4,100 an ounce on Thursday, erasing gains from the previous session as renewed tensions in the Middle East pushed oil prices higher and fueled inflation concerns. Crude oil advanced following a drone strike on Saudi Aramco’s Shaybah field that killed two people, while the US ordered some personnel and family members to leave American embassies in Saudi Arabia. Meanwhile, the US Federal Reserve is widely expected to keep interest rates unchanged next week, after Chair Kevin Warsh’s remarks last Friday did little to alter expectations for a pause. However, markets continued to anticipate a potential Fed rate hike in December amid persistent energy-driven inflation. The European Central Bank and the Bank of Japan are also expected to maintain their current interest rates next week. Although gold is traditionally considered a hedge against inflation, its lack of yield makes it less appealing when interest rates rise.
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Gold prices dropped toward $4,100 an ounce on Thursday, erasing gains from the previous session as renewed tensions in the Middle East pushed oil prices higher and fueled inflation concerns. Crude oil advanced following a drone strike on Saudi Aramco’s Shaybah field that killed two people, while the US ordered some personnel and family members to leave American embassies in Saudi Arabia. Meanwhile, the US Federal Reserve is widely expected to keep interest rates unchanged next week, after Chair Kevin Warsh’s remarks last Friday did little to alter expectations for a pause.
However, markets continued to anticipate a potential Fed rate hike in December amid persistent energy-driven inflation. The European Central Bank and the Bank of Japan are also expected to maintain their current interest rates next week. Although gold is traditionally considered a hedge against inflation, its lack of yield makes it less appealing when interest rates rise.