Gold prices regained some composure on Wednesday, snapping four consecutive sessions of losses as uncertainty over the trajectory of US monetary policy kept investors on edge ahead of the release of minutes from the Federal Reserve’s October meeting.
As of 4:05:31 GMT-5. Market open.
Gold futures climbed 0.7% to $4,096.20 per ounce, while spot gold gained 2% to $4,095.40 an ounce at the time of writing.
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“Gold has somewhat had its momentum thwarted by the stronger USD and doubts about when the next Fed rate cut may arrive,” KCM Trade chief market analyst Tim Waterer said.
“However, a bout of risk aversion in the market has kept gold in the frame for investors as a safety play, which has limited the slide.”
The Fed cut interest rates by 25 basis points last month, but chair Jay Powell has signalled caution over the prospect of further easing this year, citing limited incoming data. Markets are now assigning nearly a 49% probability to another cut at the central bank’s 9-10 December meeting, according to the CME Group’s FedWatch tool.
Gold, which offers no yield, typically benefits from lower interest rates and periods of economic uncertainty, both of which tend to reduce the relative attractiveness of interest-bearing assets.
Oil prices slipped on Wednesday after a build-up in US crude inventories, heightening worries about oversupply in the world’s largest oil-consuming market, even as sanctions on Russian exports helped limit further declines.
As of 4:05:37 GMT-5. Market open.
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Brent crude futures fell 0.6% to $64.52 per barrel at the time of writing, while West Texas Intermediate (WTI) futures dropped by the same margin to $60.33 a barrel.
“Base prices remain within the range as the market awaits the impact of sanctions, though downward pressure is seen amid the oversupply,” said Emril Jamil, a senior oil analyst at LSEG.
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Investors weighed the effects of US sanctions on Russian exports alongside rising geopolitical tensions, with Ukrainian strikes on Russian refineries and export terminals adding to concerns over potential disruptions to crude and fuel supplies.
“Oil prices found support thanks to a strong diesel market, but a persistent oversupply of oil is forcing investors to tread carefully on further gains in oil prices,” Haitong bank wrote in a research note.
Sterling was little moved on Wednesday after fresh UK inflation figures strengthened market expectations that the Bank of England will deliver another rate cut at its December meeting.