Dubai: Global gold prices were stable in Wednesday trading, hovering near the $4,160-an-ounce level as caution prevailed in financial markets ahead of key US inflation data that could influence the Federal Reserve’s monetary policy decisions. Concerns over rising oil prices and geopolitical tensions also continued to weigh on investor sentiment.
Spot gold was steady at $4,159.45 an ounce, while US gold futures for December delivery rose 0.1% to $4,182.60 an ounce. The precious metal’s stability comes despite higher global oil prices amid escalating tensions in the Middle East.
Ilya Spivak, Head of Global Macroeconomics at Tasty Life, said gold’s ability to maintain a stable trading range alongside rising oil prices suggests there are factors that could support further gains, despite the absence of a clear price trend at present.
Market attention is focused on US Consumer Price Index data due later today, ahead of producer price and retail sales figures scheduled for release on Thursday, as investors seek clearer signals on inflation and economic activity.
The data is particularly important given the ongoing debate over the future direction of US interest rates. Higher interest rates and bond yields typically increase the opportunity cost of holding gold, which does not generate income, while lower yields tend to support the precious metal.
According to Reuters, CME Group’s FedWatch tool indicates a roughly 22% probability of a US interest rate increase in October, with the likelihood rising to around 90% in December.
In other precious metals markets, silver fell 1.2% and platinum slipped 0.3%, while palladium gained 0.7%, reflecting mixed investor sentiment towards industrial and investment metals.
Gold prices are expected to remain volatile in the coming hours, with the release of US inflation data potentially reshaping market expectations for interest rates, the US dollar and demand for safe-haven assets.