Gold Climbs as Middle East Oil Supply Fears Ease and Fed Hike Bets Fade

Gold prices climbed on Tuesday, supported by easing concerns over Middle East oil supply disruptions and fading expectations of aggressive Federal Reserve rate hikes. By 04:52 ET (08:52 GMT), spot gold rose 0.3% to $4,151.89 an ounce, while gold futures gained 0.5% to $4,179.15 an ounce.

Shipping data showed Gulf oil exporters exceeding pre-war crude export levels for roughly half of September, despite ongoing tensions. The seven-day moving average for crude exports from the region stood at 18.3 million barrels per day on September 30, surpassing pre-Iran war levels for 14 days last month. Meanwhile, the Group of Seven countries' pledge to release emergency energy reserves helped calm supply fears, pushing oil prices lower to $99.50 a barrel.

Recent softer-than-expected U.S. employment figures and moderating oil prices reduced pressure on the Federal Reserve to raise interest rates swiftly. Markets now assign a 20% chance of an October rate hike, down from around 70% a week earlier. The Fed is expected to skip a rate hike in October before lifting borrowing costs in December. The minutes of the Fed’s September meeting, due this week, could provide further policy insights.

A retreat in U.S. Treasury yields and a slight weakening of the dollar index, which tracks the greenback against global currencies, also boosted gold’s appeal. ANZ analysts noted that gold has recovered from last week’s sharp decline as investors reassess rising global fiscal pressures and lower rate hike expectations.