Gold Steadies on Softer Oil Prices

Gold steadied above $4,350 an ounce on Wednesday following a sharp intraday rebound in the previous session, as oil prices extended their decline for a sixth consecutive session, easing concerns over higher inflation and interest rates. Oil prices continued to fall after President Donald Trump said US officials had a very good meeting with Iranian envoys, while Tehran said it could reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade of Iranian ports. Reports also indicated that Saudi Arabia plans to restore oil exports through its East-West pipeline in the coming days. Meanwhile, Richmond Fed President Tom Barkin warned on Tuesday that inflationary shocks could take time to fade, with a risk that elevated price pressures could become entrenched. Elsewhere, China’s gold imports through August exceeded 1,000 tons, already surpassing the total for 2025 amid strong investment demand.

Gold prices eased to around $4,330 an ounce on Tuesday, extending losses from the previous session as hawkish comments from Federal Reserve officials reinforced expectations that US interest rates will remain higher for longer. The US central bank raised its policy rate by 25 basis points last week, marking its first such move in three years, while Chair Kevin Warsh signaled that further rate increases could follow in the months ahead. Other Fed officials, including St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee, continued to emphasize the need for additional tightening to curb inflation fueled by strong demand and rising energy prices. Markets are now pricing in a roughly 90% probability of another rate hike in December, according to the CME FedWatch Tool. Elsewhere, oil prices fell for a fifth consecutive session following reports that Iran could reopen the Strait of Hormuz within seven days if the US takes initial steps to ease military pressure.

Gold fell toward $4,300 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.