Gold Prices Dip Amid Inflation Concerns and Anticipation of Federal Reserve Decision

Gold prices ticked lower on Wednesday after climbing about 1 percent in the previous session. The adjustment comes as higher oil prices stoke inflation fears, while investors await the Federal Reserve’s policy decision later in the day for clues regarding the future interest rate outlook.

By 0347 GMT, spot gold was down 0.3 percent at $4,045.29 per ounce. Meanwhile, US gold futures for December delivery dropped 0.4 percent to $4,059.00.

“Gold is moving based on the interest rate expectations and inflation risks because of higher energy prices,” said Soni Kumari, an analyst at ANZ. “As a result, the Fed will remain cautious, which remains a short-term key headwind for gold.”

Oil prices rose on Wednesday following an attack on a refinery in Saudi Arabia, the world’s biggest crude exporter. The incident renewed concerns regarding supply risks in the Middle East. Elevated energy prices raise expectations that the Fed will keep interest rates higher for longer, thereby increasing the opportunity cost of holding non-yielding bullion.

Markets are currently awaiting the Fed’s policy decision due at 1800 GMT, alongside the Personal Consumption Expenditures data scheduled for Thursday. This data serves as a key gauge closely watched by the central bank as it targets a 2 percent inflation rate. Traders largely expect the Fed to leave rates unchanged today, though they are pricing in a chance of about 84 percent for a December rate hike, according to the CME’s FedWatch Tool.

Additionally, a Reuters poll of hundreds of economists indicates that high inflation is expected to persist in the global economy well into next year. In a separate Reuters survey, analysts cut their 2026 gold price forecast for a second straight quarter due to high Treasury yields, a strong US dollar, and expectations that rates will stay higher for longer, though they still expect a recovery in 2027.

Analysts and traders also cut their platinum and palladium price forecasts for 2026 for a third straight quarter, according to the Reuters survey. Among other precious metals, spot silver slid 0.6 percent to $54.06 per ounce, platinum lost 0.4 percent to $1,533.64, and palladium gained 0.5 percent to $1,030.80.

"Global macroeconomic factors, such as fluctuating oil prices and central bank rate decisions, have an immediate impact on commodity markets and investor sentiment. For businesses and entrepreneurs, tracking these broader monetary trends is crucial for managing currency risk, financing costs, and capital allocation strategies during periods of persistent inflation." — Dr. Shishir Gupta, Founder & CEO, StartupLanes