Gold prices eased as higher oil prices raised inflation concerns and strengthened expectations that central banks may keep interest rates elevated for longer, weighing on the non-yielding asset.
Gold prices declined as rising oil prices strengthened expectations that interest rates could remain elevated, reducing the appeal of the non-yielding precious metal. The movement came ahead of the US Federal Reserve’s policy meeting.
Spot gold was under pressure as crude oil prices climbed amid concerns over supply disruptions. Higher energy prices can add to inflationary pressures, potentially limiting the scope for interest-rate cuts and supporting bond yields.
Gold has faced increased pressure in recent sessions, with the metal falling to a more than one-month low on September 14 as oil prices and US inflation data boosted expectations of higher rates.
Market data showed gold trading around US$4,293 an ounce on September 15, while Brent crude was above US$106 a barrel and West Texas Intermediate crude was above US$102.
The combination of higher oil prices, inflation concerns and expectations around US monetary policy is likely to remain an important factor for bullion markets in the near term. For jewellery businesses, continued volatility in international gold prices could also influence domestic pricing and consumer purchasing decisions.
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