FX.co ★ Gold Eases Ahead of US Inflation Data

Gold prices slipped to around $4,120 per ounce on Tuesday, surrendering part of the prior session’s gains as investors waited for a key US inflation reading that could influence expectations for Federal Reserve policy. Markets are now assigning roughly an 84% chance of a Fed rate hike in December, up from about 74% a week earlier, as policymakers continue to grapple with persistent inflationary pressures. Higher interest rates increase the opportunity cost of holding non-yielding assets such as gold, making the metal less appealing to investors.

On Monday, bullion had climbed nearly 2% as oil prices tumbled amid growing optimism over a possible peace agreement between the US and Iran. President Donald Trump said he was confident the conflict with Iran was nearing an end after talks with Qatar’s prime minister. Softer crude prices could help ease inflationary pressures, potentially lessening the need for further monetary tightening.