Gold prices edged lower on Wednesday, retreating from a 1% gain in the previous session, as rising oil prices fueled inflation concerns. Investors were also focused on the Federal Reserve's policy decision later in the day, which could provide insights into the future 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 noted that gold's movement was driven by interest rate expectations and inflation risks stemming from higher energy prices.
Oil prices climbed after an attack on a refinery in Saudi Arabia, the world's largest crude exporter, which renewed supply concerns in the Middle East. Higher energy prices are expected to keep the Fed cautious, which remains a short-term challenge for gold. The Fed's policy decision is due at 1800 GMT, with markets also awaiting the Personal Consumption Expenditures data on Thursday.
Traders anticipate the Fed will leave rates unchanged today but see an 84% chance of a December rate hike, according to the CME's FedWatch Tool. Meanwhile, analysts have lowered their 2026 gold price forecast for the second straight quarter due to high Treasury yields and a strong US dollar, though they still expect a recovery in 2027.
Other precious metals saw mixed movements, with spot silver sliding 0.6% to $54.06 per ounce, platinum losing 0.4% to $1,533.64, and palladium gaining 0.5% to $1,030.80.