Gold shines amid oil decline and focus on US elections
Gold prices rose amid an oil decline, with investors focusing on US election results and central bank interest rate decisions.
Translated by Qiyas from الراي — Original source
Gold prices rose at the start of Asian market trading on Tuesday, after jumping more than 2 percent in the previous session, as a sharp drop in oil prices eased inflation concerns, while investors awaited the results of the U.S. midterm congressional elections.
Spot gold rose 0.3 percent to $3,960.80 per ounce by 00:32 GMT, continuing its gains after recovering from its one-year low recorded on Friday.
Oil prices fell more than 7 percent on Monday, as Tehran announced that negotiations between Iran and the United States to end the eight-month war are still ongoing, following the conclusion of several days of talks between Iran and Qatari mediators that ended with revised proposals without any progress.
Markets are now focused on the U.S. midterm elections for signs regarding fiscal policy expectations and overall investor confidence.
According to the CME Group’s FedWatch tool, traders currently see a 73 percent probability that the Federal Reserve (the U.S. central bank) will raise interest rates in December.
Higher interest rates would increase the opportunity cost of holding non-yielding gold, reducing its appeal to investors.
The Bank of England is expected to raise interest rates on Thursday to combat inflationary pressures stemming from rising energy costs, with Reuters poll economists forecasting the bank will lift the interest rate to 4 percent from 3.75 percent.
Meanwhile, the Bank of Japan said on Monday that Japan has made gradual progress toward keeping inflation at the central bank’s 2 percent target, strengthening the case for further monetary tightening.
Slovakia’s central bank governor, Peter Kazimir, said the European Central Bank will likely need to raise interest rates again to prevent high inflation from becoming entrenched, and markets may be underestimating what is required to ease price pressures.
For other precious metals, spot silver rose 0.3 percent to $50.79 per ounce, platinum increased 0.2 percent to $1,451.48, and palladium rose 0.2 percent to $970.50.
