Gold Price Rebound Falters Amid Fed Rate Hike
Gold prices rose towards $4,300 an ounce on Thursday after oil prices lost steam. The recent rally in oil prices had been putting pressure on gold, but Saudi Arabia's efforts to restore its East-West pipeline capacity and the US Energy Secretary's reports of increased crude passage through the Strait of Hormuz eased inflationary pressures.
However, the precious metal remained under pressure after the US Federal Reserve raised interest rates by 25 basis points to 3.75%-4%. Fed Chair Kevin Warsh also stated that inflation remains elevated, citing data from last week's core US inflation report, which showed a higher-than-expected increase in August.
The news of the pipeline capacity restoration and increased crude passage came as reports suggested Saudi Arabia aims to restore around half of its East-West pipeline capacity within days and return it to full operation within six weeks.