Gold climbs above $4,050 as oil prices fall and markets await Fed decision
Gold rose to around $4,065 in early Asian trade, supported by lower oil prices, while investors look ahead to the Federal Reserve's policy meeting for clues on future interest rates.
Gold prices edged higher to about $4,065 per ounce in the early Asian session on Wednesday, buoyed by a decline in crude oil prices. The drop in oil, which fell for a second day amid focus on Middle East peace talks, reduced inflation concerns and may ease pressure on the Federal Reserve's monetary stance.
"Softer oil prices will probably provide some lift for gold because it relieves the inflation worries and arguably moderates Fed hawkishness to some degree," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Traders are awaiting the Fed's October policy meeting later in the day, with most expectations pointing to rates being left unchanged. Market pricing shows a 6.6% probability of a rate hike at the meeting, while the odds of a December increase remain high at 84.4%, reflecting lingering uncertainty over energy prices and inflation.
Analysts at Scotiabank noted a mixed outlook across commodities, observing that copper is extending its recovery while gold appears vulnerable near the $4,000 per ounce level. They highlighted that easing geopolitical tensions could reduce risk for precious metals, and that declining silver prices further weigh on the sector.
In the energy market, crude prices have settled into a narrow range, with WTI just above $100 per barrel and Brent above $115. Global equity indices showed mixed performance, with Chinese markets weakening while South Korea's Kospi posted a 3% gain.
Technical analysis indicated a bearish short-term bias for gold, with the price trading below key moving averages and the 20-day Bollinger band. Immediate support is seen near $4,015, while resistance lies around $4,125 to $4,235, suggesting that a breakout above these levels would be needed for a stronger upside.