Gold prices saw a modest increase on Monday, supported by softer oil prices. Investors are closely watching the Federal Reserve's potential interest rate hikes and seeking clarity on the central bank's policy direction. Spot gold rose 0.3% to $4,175.60 per ounce, while US gold futures for December delivery gained 0.4% to $4,196.40.
Tim Waterer, chief market analyst at KCM Trade, noted that gold's rise was influenced by the softer tone in oil prices, which could ease inflation concerns. He suggested that a sustained decline in oil prices or lower yields would further benefit gold by reducing inflation and rate worries.
Oil prices dipped after US President Donald Trump waived sanctions and tariffs on Russia, potentially increasing Russian fuel exports. Meanwhile, US import prices rose more than expected in September, driven by higher energy costs and other goods, signaling persistent inflation pressures amid the Middle East conflict.
Market participants are awaiting the Federal Open Market Committee's meeting on US interest rates and the upcoming Personal Consumption Expenditures (PCE) data. Traders currently see a 16% chance of a rate hike this month and a 92% chance in December. Higher interest rates typically reduce the appeal of gold as a non-yielding asset.
Elsewhere, the European Central Bank is expected to raise interest rates by 25 basis points at least once more this year to combat inflation, according to the International Monetary Fund. Other precious metals also saw gains, with spot silver up 0.9% to $57.54 per ounce, platinum rising 0.7% to $1,642.29, and palladium climbing 1.5% to $1,129.13.