Gold Price Today: Gold prices declined on Wednesday, extending losses and remaining lower in four of the last five trading sessions, as rising inflation concerns linked to higher energy prices strengthened expectations of additional interest rate hikes by the US Federal Reserve. Bullion has also fallen more than 1 per cent so far this week.
As of 5:55 am, spot gold was down 0.6 per cent at USD 4,118.02. Spot silver also declined 0.9 per cent to USD 57.47.
In the domestic market, gold and silver prices were not trading at the time of writing. Gold and silver futures on the Multi Commodity Exchange (MCX) had settled at Rs 1,46,041 per 10 grams and Rs 2,09,049 per kg, respectively.
Rising energy prices lift inflation concerns
Bullion prices came under pressure as rising energy prices increased inflation concerns.
Brent crude oil was trading at 110.12, up 1.30 points or 1.19 per cent, while WTI crude oil was at 98.12, higher by 0.97 points or 1.00 per cent.
According to the information provided, rising inflation levels due to higher energy prices have led to increased expectations of higher interest rates. As per CME’s FedWatch Tool, there is a more than 90 per cent probability of a rate hike by the US Federal Reserve at the December FOMC meeting, which would mark the second rate hike by the Fed in 2026.
Rising inflation concerns due to higher energy prices boosted expectations of interest rate hikes, reducing gold’s appeal and weighing on bullion prices.
Weaker dollar, bond yields limit losses
The downside in gold prices was restricted by weakness in the US dollar and lower US Treasury yields.
A weaker US Dollar Index (DXY) makes gold cheaper for holders of other currencies, supporting demand for the precious metal.
Lower yields on the US 10-year Treasury bond reduce the opportunity cost of holding non-yielding assets such as gold, making bullion more attractive to investors.
Markets await Fed policy signals
Market participants are closely watching the upcoming US Federal Open Market Committee (FOMC) meeting scheduled next week, along with the US interest rate decision due on October 28.
The outcome of these events is expected to provide further direction for gold prices.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)