Gold fell Tuesday as a firmer dollar revived Fed rate concerns, but a sharp drop in oil prices eased inflation fears and limited the decline. XAU/USD slipped 0.5% to $4,320.63 an ounce, while silver and platinum also retreated. Analysts at ANZ still see structural support from central bank buying and fiscal concerns once rate-hike expectations fade.
Dollar strength revives Fed concerns
Gold prices fell on Tuesday as the dollar strengthened and investors refocused on the Federal Reserve's rate outlook following last week's hike. XAU/USD fell 0.5% to $4,320.63 an ounce, while Gold Futures declined 0.6% to $4,357.22. Silver fell 1.1% to $65.33 an ounce, and platinum declined 1.2% to $1,783.41. The U.S. Dollar Index rose marginally to 100.46 after climbing more than 1% the prior week.
ANZ analysts said the focus has shifted back to Fed policy as inflation risks remain elevated following the Treasury's bond buybacks. Energy prices remain well above pre-conflict levels, meaning inflation could moderate only slowly and unevenly toward the Fed's target. That keeps the risk of a more hawkish stance alive and should weigh on gold in the near term, while a firmer dollar makes bullion priced in the currency more expensive for overseas buyers.
Oil slide and technical pressure cap the drop
The retreat in oil prices is providing some relief, however, as concerns around Middle East supply disruptions ease and diplomacy around the U.S.-Iran conflict returns to focus. Lower energy costs reduce the risk that the Fed will need to respond to another inflation shock.
That pullback also lines up with a weak technical picture: gold was trading below its 200-period moving average and the Ichimoku cloud resistance zone, with the $4,320 level acting as structural support after being tested three times.
Central bank buying still underpins the longer-term case
ANZ said the broader backdrop remains supportive for gold despite the near-term rate pressure. Recent policy interventions, including U.S.-Japan efforts to stabilize the yen and Treasury measures aimed at easing pressure on long-dated yields, highlight concerns over rising debt levels, fiscal stress and funding costs. ANZ expects those structural concerns to draw investors back into gold once rate-hike expectations begin to fade, and the recovery in ETF flows suggests investment demand is already starting to return.
Central bank buying is another source of support: ANZ said China accelerated its gold purchases to around 20 tonnes in August, the highest level in three years, while Chinese gold imports have risen more than 80% year over year, helping offset softer imports from India.
Sources: Investing.com (Commodities & Futures News), Investing.com (Commodities & Futures News)
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