FX.co ★ Gold Rises on Lower Oil Prices

Gold prices climbed back above $4,350 an ounce on Tuesday, rebounding from the previous session’s losses as a continued slide in oil prices eased inflation concerns and tempered expectations for further interest rate increases. Crude has now fallen for four consecutive sessions, pressured by intensified diplomatic efforts to end the Middle East conflict and indications that energy supplies from the region remain largely uninterrupted.

President Trump is set to address the UN General Assembly in New York later today and may hold a sideline meeting with Iranian President Pezeshkian, developments that markets are watching closely for any potential impact on geopolitical risk and energy markets.

The decline in oil prices is helping to alleviate inflationary pressures, in turn reducing the perceived need for additional Federal Reserve rate hikes. Even so, recent hawkish remarks from Fed officials have reinforced expectations of a tighter US interest-rate environment following last week’s first rate increase in three years.

Against this backdrop, gold continues to draw support from strong long-term fundamentals, including persistent central bank buying, elevated geopolitical uncertainty, and ongoing concerns about fiscal sustainability and currency debasement.