
AI-generated summary
Oil prices have recently been pushed up by concerns about supply disruptions, and the market is concerned that this will lead to another rise in inflation, forcing the Federal Reserve to maintain or even increase interest rates. As a traditional hedging asset, the price of gold is sensitive to real interest rates. When nominal interest rates rise and inflation expectations do not fall, the demand for hedging is easily weakened.
Gold prices fell on Tuesday (15th). (French information photo)
[Financial Channel/Comprehensive Report] The surge in oil prices has raised concerns about rising inflation and strengthened expectations that the Federal Reserve (Fed) will raise interest rates this week. The U.S. dollar and U.S. bond yields rose. The price of gold fell on Tuesday (15th). Experts believe that gold is currently in a range-bound pattern. If interest rates continue to rise, it may be further sold off.
Spot gold fell 0.1% to US$4,293.29 per ounce, falling to its lowest level since August 7.
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U.S. gold futures fell 0.4% to $4,332.80 an ounce.
StoneX senior market strategist Daniel Pavilonis said: "Rising energy prices will lead to increased inflation, and higher inflation may push up interest rates, which is not good for gold... Gold is currently in a range-bound pattern, and if interest rates continue to rise, gold prices may be further sold off."
Traders are awaiting the Fed's interest rate decision to be announced at 2 p.m. ET on Wednesday (2 a.m. Thursday, Taiwan time). Financial markets are currently betting that Fed policymakers will raise interest rates by 1 point (25 basis points) to a range of 3.75-4.00% and signal further tightening in the future.
"I think a lot of (rate hike fear) is already priced in... and it really depends on what the Fed will say next, will they continue to raise rates? Or will they watch the situation? Overall, this is not a good sign for gold," Pavilonis said.
"The risks of the Fed's hawkish bias have mostly been priced in," ING analysts said in a note. "However, gold may still come under pressure if policymakers signal that interest rates will remain high for longer."
On the other hand, oil prices rose by more than $3 as shipping industry sources said oil loading operations at the Saudi Arabian Red Sea port of Yanbu had been suspended. Libya has also halted operations at three oil fields, fueling market concerns that disruptions to key oil supply routes could last for weeks.
Other precious metals trading sections:
Spot silver rose 0.3% to $63.41 an ounce.
Spot platinum rose 0.7% to $1,772.32 an ounce.
Spot palladium rose 0.1% to $1,294.14 an ounce.
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AI outlook — possibilities, not facts
If the Fed maintains a hawkish stance in Wednesday's interest rate decision, gold prices will fall further in the short term
Likely · Within days
If oil price and supply disruptions continue for several weeks, it will further increase inflation expectations and indirectly be negative for gold.
Possible · Within weeks

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