Gold futures decline and spot prices rise amid anticipation of interest rates and oil

Gold futures for next December (Comex) fell by 0.92% to $4,347.30 per ounce. This was in contrast to spot contracts, which rose by 1.10% to $4,310.71 per ounce, after hitting its lowest level in nearly six weeks yesterday, Wednesday.

“Oil prices remain a key factor to watch,” said Kelvin Wong, chief market analyst at Onda. “If oil prices continue to decline, this could support gold prices rising, at least from a medium-term perspective. Until that happens, I expect gold to remain range-bound.”

He added that the current rise in gold prices is also largely driven by technical factors, as the market took into account the Federal Reserve's signals of further monetary tightening.

Although gold is a hedge against inflation, high interest rates reduce its attractiveness compared to assets that generate returns.

The US Federal Reserve raised interest rates yesterday, Wednesday, and hinted at more increases in the coming months, and the new US central bank head, Kevin Worsh, joined a unanimous decision that effectively acknowledges the Trump administration’s inability so far to control inflation, which policymakers fear will worsen.

The dollar maintained its highest level in 7 weeks today, Thursday, and the dollar index, which measures the performance of the American currency against a basket of currencies, recorded a reading of 100.1420 points by 10:15 Moscow time, and before that trading it was at 100.33 points, which is its strongest level since last July 31.