Silver Slides to Near Three-Month Low

Gold prices fell to around $4,000 per ounce on Tuesday, reversing gains from the previous session as the dollar strengthened ahead of key central bank policy decisions this week, weighing on the precious metal. Renewed investor enthusiasm for the AI trade following Anthropic’s IPO filing also bolstered the dollar, reflecting the sector’s contribution to US economic growth. Meanwhile, oil prices declined for a second consecutive session amid diplomatic efforts to ease tensions in the Middle East, although prices remained elevated, keeping inflation concerns in focus and reinforcing expectations of further monetary tightening. The US Federal Reserve is widely expected to hold interest rates steady this week, with investors closely monitoring policymakers’ forward guidance for indications of a possible rate hike in December. Market participants will also scrutinize upcoming US GDP and PCE price index data for further clues about the economic outlook and the Fed’s future policy direction.

Gold prices hovered near $4,020 an ounce on Tuesday after recently hitting a more than three-month low, as falling oil prices and bargain-hunting ahead of the Federal Reserve’s policy decision offered some support. Crude prices fell for a second consecutive session amid renewed diplomatic efforts to defuse US-Iran tensions, helping ease near-term inflation concerns. However, energy prices remained elevated, keeping inflation risks in focus and sustaining expectations of further monetary tightening, which could weigh on non-yielding gold. The Federal Reserve is widely expected to leave interest rates unchanged this week, with markets focused on policymakers’ forward guidance for clues about the rate outlook. Markets are pricing in a roughly 82% chance of a rate hike in December, according to the CME FedWatch Tool. Investors will also watch upcoming US GDP and PCE price index data for further insight into the economic outlook and the Fed’s policy path.

Gold prices were little changed near $4,000 an ounce on Monday after hitting a more than three-month low of $3,975 on Friday, as falling oil prices eased inflation concerns ahead of this week’s central bank meetings. Oil retreated from last week’s surge but remained near six-month highs amid hopes of easing US-Iran tensions, with potential supply disruptions still posing inflation risks. The Fed is scheduled to announce its rate decision on Wednesday, with policymakers widely expected to hold rates steady following September’s hike. Meanwhile, the probability of another rate increase in December has climbed above 80%, according to the CME FedWatch Tool. Investors also await Thursday’s US PCE inflation data for clues on the rate outlook, while attention is turning to the November 3 US midterm elections. Elsewhere, the ECB and the Bank of Japan are also expected to keep rates unchanged, while the Bank of Canada is widely expected to deliver its first rate hike since 2023.