Gold Rises as Oil Drops Below $100 and Yields Ease

Gold prices climbed in early US trading on Tuesday as US Treasury yields softened and oil prices dipped below the $100 mark. Spot gold rose 0.15% to $4,145.67 an ounce, while spot silver fell 0.4% to $60.77 an ounce. The decline in oil prices helped ease pressure on precious metals, supporting their recent rebound amid diminishing expectations of an October rate hike.

The chance of a rate hike in October has decreased, with markets assigning a 78% probability that the Federal Reserve will keep rates unchanged at its October 28 meeting. However, inflation concerns maintain the possibility of another rate increase this year. Key data releases, including the Fed’s meeting minutes on Wednesday and the preliminary October consumer sentiment reading on Friday, will shape future market movements.

Geopolitical tensions around the Strait of Hormuz persist, though regional oil exports have returned to pre-war levels. The Group of Seven agreed to release 100 million barrels of crude oil and/or diesel fuel from their reserves, further boosting supply. Lower oil prices may reduce near-term inflation pressure, benefiting gold as yields ease.

Global stock markets showed positive risk appetite, with the Dow Jones gaining 0.46%, the S&P 500 reaching a new all-time high of 7,835.09, and the Nasdaq Composite rising 0.56%. In Europe, the Stoxx 600 index increased 0.28%, while Asian markets saw gains, with Japan’s Nikkei 225 up 1.05%.