Gold prices dipped for a fourth straight session on Wednesday, as rising oil prices fueled inflation concerns. Investors are now focusing on the Federal Reserve's upcoming policy meeting for signals on future interest rate adjustments. Spot gold edged up 0.3% to $4,136.22 per ounce by 1:55 pm EDT, after earlier hitting its lowest point since the start of the week. US gold futures for December delivery climbed 0.2% to $4,152.60 per ounce.
Peter Grant, vice president and senior metals strategist at Zaner Metals, noted that markets are anticipating a single 25-basis-point rate hike this year, likely in December. He added that gold prices are expected to remain range-bound with a downward bias. The Federal Reserve's October 27-28 meeting and next week's US Personal Consumption Expenditures (PCE) report are key events that could provide further clarity on rate movements.
Markets are currently pricing in an 88% chance of a rate hike in December, according to CME's FedWatch Tool. Nearly all economists surveyed by Reuters expect the Federal Reserve to hold rates steady this month before raising them in December. Higher interest rates typically reduce gold's appeal as investors favor yield-bearing assets.
Brent crude held steady around $108 a barrel on Wednesday, as geopolitical tensions in the Middle East continued to weigh on market sentiment. Giovanni Staunovo, an analyst at UBS, suggested that gold is in a short-term consolidation phase, with limited upside potential as long as the Middle East conflict remains unresolved. Among other precious metals, spot silver fell 0.6% to $57.62 per ounce, platinum dropped 1.2% to $1,629.14, and palladium declined 1.1% to $1,090.15.