Bullion prices are edging higher in early Asian trading as easing oil prices reduce immediate inflation pressure and support demand for non-yielding assets. Investors are also watching U.S. midterm election results and upcoming labor market data for signals on the Federal Reserve's next policy move.
Highlights
- Spot gold rises 0.2% to $3,934.75 per ounce and U.S. gold futures increase 0.1% to $3,943.20 as of 0024 GMT.
- Oil prices fall about 1% to a four-week low, easing inflation concerns and supporting expectations the Federal Reserve may not extend higher rates.
- World Gold Council projects India's gold demand will hit a six-year low in 2026 as high prices reduce jewellery sales and investment demand.
Price moves and policy signals
As reported by Reuters, spot gold is up 0.2% at $3,934.75 per ounce by 0024 GMT, while U.S. gold futures for December delivery rise 0.1% to $3,943.20.Oil prices eased about 1% on Tuesday to their lowest level in nearly four weeks, as markets weigh talks to end the wars in Ukraine and Iran against concerns that recent attacks in both conflicts could still disrupt supply. Lower oil prices help ease inflation concerns and strengthen expectations that the Federal Reserve may not need to keep interest rates high for an extended period, increasing gold's appeal.
Traders currently see a 78% chance that the Fed will raise rates in December, according to CME's FedWatch tool. Market participants are now looking to U.S. labor data and the outcome of the midterm elections for further direction on monetary policy and broader asset prices.
Broader metals market and demand outlook
Investors are bracing for a potentially strong Democratic showing in Tuesday's midterm elections, a result that could bring greater volatility across financial markets.In physical demand, India's gold demand is expected to fall to a six-year low in 2026 as elevated prices weigh on jewellery sales and investment demand moderates, the World Gold Council said on Tuesday.
Among other precious metals, spot silver falls 0.2% to $49.67 per ounce, platinum rises 0.3% to $1,422.15 and palladium gains 0.5% to $938.49.
Our earlier article on UBS Global Wealth Management’s outlook for a longer Fed tightening cycle explained why the bank expects additional rate hikes in December and again in March 2027 as inflation pressures remain persistent. We also noted that rate-futures pricing shifted toward “higher for longer” policy expectations, a backdrop that can influence dollar rates, Treasury yields, and interest-rate-sensitive assets like gold.
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