Gold Prices Ease Ahead of US Midterms
Gold prices slipped to around $3,940 an ounce on Tuesday after gaining nearly 2% in the previous session, as rising oil prices revived inflation concerns ahead of the US midterm elections. Oil rebounded following Monday’s sharp sell-off after an Iranian official said Tehran and Washington remained far from a deal to end the war, while the US struck Iran’s Qeshm Island. Higher energy prices could fuel inflation and reinforce expectations that interest rates will remain elevated for longer. Markets are currently pricing in nearly a 75% chance of a Fed rate hike in December, according to CME’s FedWatch Tool. Meanwhile, Democrats are favored to regain control of the House of Representatives, while the Senate race remains uncertain. Separately, the World Gold Council cut its forecast for gold investment growth this year to 200 metric tons from 400 tons, citing weaker demand for bars and coins, but raised its estimate for central bank purchases.
Gold prices slipped to around $3,940 an ounce on Tuesday after gaining nearly 2% in the previous session, as rising oil prices revived inflation concerns ahead of the US midterm elections. Oil rebounded following Monday’s sharp sell-off after an Iranian official said Tehran and Washington remained far from a deal to end the war, while the US struck Iran’s Qeshm Island. Higher energy prices could fuel inflation and reinforce expectations that interest rates will remain elevated for longer. Markets are currently pricing in nearly a 75% chance of a Fed rate hike in December, according to CME’s FedWatch Tool.
Meanwhile, Democrats are favored to regain control of the House of Representatives, while the Senate race remains uncertain. Separately, the World Gold Council cut its forecast for gold investment growth this year to 200 metric tons from 400 tons, citing weaker demand for bars and coins, but raised its estimate for central bank purchases.