Gold fell below $4,150 an ounce on Wednesday as a stronger dollar offset easing pressure on the Federal Reserve to raise rates. Recovering Middle East oil flows and a pullback in Treasury yields took some heat off inflation concerns, but the metal still trades below its key averages and remains down sharply since the U.S.-Iran conflict began.
Gold fell 0.7% to $4,136.82 an ounce at 01:46 ET on Wednesday. Gold Futures dropped 0.6% to $4,163.07, while silver fell 1.1% to $60.72 and platinum declined 0.9% to $1,694.76. A stronger dollar pressured bullion even as other factors worked in its favor: the U.S. Dollar Index rose 0.3% to 102.09.
Middle East oil flows ease rate concerns
Oil supplies from the Middle East have recovered to roughly four-fifths of pre-conflict levels, according to analysts and research firms. The improvement has helped stabilize oil prices and reduced some pressure on inflation and the Fed's rate outlook.
Risks to energy supplies remain elevated, though. Iran has increased attacks on tankers in the Strait of Hormuz in recent days. Oil executives have warned the industry is running out of temporary measures as the U.S.-Iran war approaches its eighth month.
Treasury yields also retreated on Tuesday after longer-dated maturities surged to fresh multi-decade highs a day earlier. The pullback has supported gold by reducing the opportunity cost of holding the non-yielding metal.
Fed hike bets fade as gold holds below key averages
Federal Reserve officials have continued to push back against the likelihood of an imminent rate increase. Traders are now pricing in a less than 20% probability of an October hike, down from about 40% a week earlier.
Minutes from the Fed's September meeting are due later Wednesday. Policymakers raised borrowing costs at that meeting for the first time in three years, and the minutes could offer fresh clues on the direction of policy.
Gold remains in a relatively tight range in October and is trading below several closely watched price averages. The metal is also down more than 20% since the U.S.-Iran conflict began in late February, underscoring the sharp reversal from earlier gains.
Source: Commodities & Futures News
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