Gold prices extended their decline for a fourth consecutive session on Wednesday, as rising oil prices heightened inflation worries among investors. The surge in oil prices has led to concerns about broader economic implications, putting downward pressure on gold.
Spot gold fell by 0.2%, reaching $4,118.18 per ounce by 0319 GMT. Meanwhile, US gold futures for December delivery also dropped 0.2% to $4,136.20. The market's focus is now shifting to next week's Federal Reserve policy meeting, where investors hope to gain insights into the future trajectory of interest rates.
The interplay between oil prices and inflation expectations is a key factor influencing gold's performance. Higher oil prices typically raise production costs, which can fuel inflation. This, in turn, may prompt central banks to tighten monetary policy, potentially impacting gold's appeal as a hedge against inflation.