Gold gains as oil, dollar retreat; investors brace for US inflation test

Oil prices fell on Tuesday and were on track for their first decline in nearly a week, while the dollar slipped from 18-month highs.The benchmark 10-year yield slipped to its lowest level since Oct 2.

Lower yields reduce the opportunity cost of holding non-interest bearing bullion, which is priced in US dollars.

Cleveland Fed president Beth Hammack said the US central bank should move “relatively quickly” to a more restrictive monetary policy stance to control inflation.

Currently, traders see only a 17% chance of a Fed rate hike this month but are pricing in an 87% chance of a December increase, according to CME’s FedWatch tool.

“Central bank diversification, together with concerns about rising public debt levels and increasing debt-servicing costs, should continue to underpin the market. We therefore expect gold prices to stabilise and resume their uptrend toward year-end and into 2027,” said UBS analyst Giovanni Staunovo.

Among other metals, spot silver edged up 0.2% to US$60.4481 per ounce, platinum gained 0.9% to US$1,701.10 per ounce and palladium rose 0.5% to US$1,149.52 per ounce.

Source: Theedgemalaysia