Gold rises 0.56 percent to $3,907 as softer oil eases inflation concerns
Gold rose on Monday, with spot bullion at about $3,907.22 an ounce, up $21.69 or 0.56%, as weaker oil prices eased some inflation concerns that had pressured the metal. Silver outpaced it, rising 2.01% to $50.29 an ounce, a gain of $0.99.
The recovery follows a sharp selloff at the end of last week, when pressure across financial markets forced investors to reassess positions in safe-haven assets. Crude prices fell more than 3% at the start of the week as diplomatic efforts involving Iran and Qatar raised hopes of progress toward easing the Middle East conflict, and lower oil prices can reduce inflationary pressure across transport, manufacturing and consumer prices.
That matters for gold because the metal does not pay interest. The Federal Reserve kept its target range unchanged at 3.75% to 4% at its October 27-28 meeting on a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack preferring a 25-basis-point increase. The committee said economic activity was expanding at a strong pace and inflation was still elevated, and several Fed officials have since argued that more rate increases could be necessary.
Saxo Bank head of commodity strategy Ole Hansen said technical selling and liquidity pressures were overshadowing gold's longer-term investment appeal in the near term. US December gold futures traded at $3,911.80, up 0.33%, while platinum slipped 0.05% to $1,435.25 and palladium fell 0.58% to $982.
In the UAE, the 24-karat rate rose to AED470.25 a gram from AED467, with 22-karat at AED435.50, 21-karat at AED417.50 and 18-karat at AED358. Prices remain below October's peak above AED500 a gram, leaving buyers watching whether bullion can consolidate above $3,900 as oil, Fed policy and the November 3 US midterm elections set the tone.
