Gold prices edged lower on Wednesday, retreating from a 1% gain in the prior session, as rising oil prices fueled inflation concerns. Investors were also focused on the Federal Reserve's upcoming policy decision, seeking clues about the central bank's rate outlook. Spot gold fell 0.3% to $4,045.29 per ounce by 0347 GMT, while US gold futures for December delivery dropped 0.4% to $4,059.00.
Analysts attributed gold's movement to shifting interest rate expectations and inflation risks tied to higher energy costs. Soni Kumari of ANZ noted that the Fed's cautious stance remains a key short-term challenge for gold. Oil prices climbed after an attack on a Saudi refinery, reigniting supply concerns in the Middle East.
The market anticipates the Fed will hold rates steady today but sees an 84% chance of a December rate hike, according to the CME's FedWatch Tool. Elevated energy prices are expected to keep inflation elevated well into next year, according to a Reuters poll of economists.
Analysts have lowered their 2026 gold price forecasts for the second consecutive quarter, citing high Treasury yields, a strong US dollar, and prolonged higher rates. However, they still predict a recovery in 2027. Similarly, platinum and palladium price forecasts for 2026 were cut for the third straight quarter. Among other metals, silver slid 0.6% to $54.06 per ounce, platinum lost 0.4% to $1,533.64, and palladium gained 0.5% to $1,030.80.