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Gold
Source: Newsmaker.id
Gold (XAU/USD) traded around US$4,119 per troy ounce on Wednesday (October 21), marking its fourth consecutive session of decline. The precious metal faced pressure as rising oil prices reignited inflation concerns, while investors shifted their focus toward next week’s Federal Reserve policy meeting, seeking clues regarding the future trajectory of interest rates.
The surge in oil prices has fueled anxieties over energy supplies from the Middle East—specifically regarding potential shipping disruptions in the Red Sea and threats to Saudi Arabia’s oil infrastructure. This has led the market to reconsider the possibility that inflation may remain elevated, which could prompt the central bank to maintain a tight monetary policy for longer.
Meanwhile, the market has largely priced in a decision by the Fed to keep interest rates unchanged during the October 27–28 meeting. However, the probability of a rate hike in December remains high. Higher interest rates typically exert downward pressure on gold, as they enhance the appeal of yield-bearing assets compared to non-interest-bearing precious metals.
The movement of the US dollar is also in focus, as the dollar index has begun to stabilize following a recent period of weakness. This has further dampened demand for gold, with investors now awaiting next week’s US Personal Consumption Expenditures (PCE) data—a key indicator used by the Fed to gauge inflationary pressure.
Newsmaker Analysis: Gold continues to face pressure from a combination of rising oil prices, a stabilizing US dollar, and expectations of high interest rates. As long as inflation shows no signs of easing, the potential for gold to rally remains limited. However, should expectations for interest rate hikes begin to decline, gold could regain momentum and see a recovery. (asd)
Source: Newsmaker.id