Gold Pressured by Hawkish Fed Remarks

Gold traded below $4,350 an ounce on Tuesday, extending losses from the previous session as hawkish comments from Federal Reserve officials strengthened expectations for further US interest rate hikes. On Monday, Chicago Fed President Austan Goolsbee said the central bank must account for persistent supply shocks, while St. Louis Fed President Alberto Musalem said additional increases may be needed to bring inflation toward the Fed’s target. Meanwhile, falling oil prices offered some support for gold amid increased diplomatic efforts to end the Middle East conflict and signs of continued energy flows from the region. President Trump is due to address the UN General Assembly in New York later today and may meet Iranian President Pezeshkian on the sidelines. Gold also remains supported by longer-term factors, including continued central bank buying, geopolitical uncertainty and concerns over fiscal sustainability and currency debasement.

Gold prices climbed above $4,350 an ounce on Tuesday, recovering from the previous session’s losses as falling oil prices eased inflation concerns and expectations for further rate hikes. Oil prices declined for four straight sessions amid increased diplomatic efforts to end the Middle East conflict and signs of continued energy flows from the region. President Trump is scheduled to address the UN General Assembly in New York later today and may meet with Iranian President Pezeshkian on the sidelines. Lower oil prices help ease inflationary pressures, reducing expectations for additional rate hikes by the Federal Reserve. Still, hawkish comments from Fed officials reinforced expectations for a tighter US interest-rate outlook following last week’s first rate hike in three years. Gold also continues to benefit from strong long-term fundamentals, including sustained central bank purchases, elevated geopolitical uncertainty, and concerns over fiscal sustainability and currency debasement.

Gold prices edged lower toward $4,350 on Monday, pressured by a stronger US dollar and profit-taking after last week’s rally, while investors continued to monitor developments in the Middle East. Bullion reached its highest level in more than a week on Friday as falling oil prices eased concerns over prolonged inflationary pressures. Oil prices extended their decline at the start of the week as investors looked for signs of diplomatic progress on the Iran conflict around this week’s UN meetings, although tensions remained elevated as Iran and the US exchanged fresh threats on Sunday. Meanwhile, rate-hike expectations remain elevated, with traders pricing an 88% probability of a US rate increase in December, according to the CME FedWatch Tool. Last week, both the Federal Reserve and Bank of Japan raised interest rates and signaled further tightening, following a similar move by the ECB earlier this month.