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Gold gains as lower oil prices temper inflation fears; US inflation in focus

By Reuters News

By Sherin Sans

Nov 9 (Reuters) - Gold prices rose on Monday as lower oil prices helped ease inflation concerns, while investors awaited US price data this week that could shape the Federal Reserve's rate outlook.

Spot gold rose 0.7% to $4,094.43 per ounce by 0918 GMT, while US gold futures for December delivery also rose 0.7% to $4,103.60.

Bullion gained about 5% last week as Democrats won the US midterm elections and raised hopes for an end to the Middle East conflict.

Oil prices fell on Monday after US President Donald Trump downplayed the likelihood of new strikes on Iran, though attacks on ships near the Strait of Hormuz kept supply concerns in focus.O/R

"Gold is rising on lower oil prices, a softer dollar and easing bond yields. The Democratic sweep has sparked optimism for a US-Iran resolution and could bring more scrutiny of the AI boom, which would help contain inflation and temper Fed tightening," said Nikos Tzabouras, an independent financial markets analyst.

The dollar softened, making greenback-priced bullion more affordable for buyers overseas. USD/

Gold fell 0.3% on Friday after stronger-than-expected US payrolls data reinforced expectations that the Federal Reserve could keep interest rates higher for longer, boosting the dollar and Treasury yields.

Traders currently see an 81% chance that the Fed will raise rates in December, higher than the 73% chance before the jobs data, according to CME's FedWatch tool.

Although gold is typically seen as an inflation hedge, higher interest rates tend to reduce the appeal of non-yielding bullion.

Market focus now turns to US consumer price data on Tuesday and producer price figures on Friday, which could shape expectations for the Fed's next move.

"CPI and PPI will be pivotal for gold’s trajectory. Persistent inflation would bolster the case for additional Fed tightening and weigh on bullion, while any downside surprise could fuel a further rebound," Tzabouras said.

Among other metals, spot silver climbed 1.2% to $52.51, platinum gained 0.8% to $1,545.87 and palladium rose 0.9% to $1,033.24.


Spot Gold vs Brent Crude https://tmsnrt.rs/4enSjQn

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