Gold Softens on Prospects of Fed Rate Hikes as Brent Tops $100
Gold prices declined as rising Brent crude costs fueled inflation concerns and expectations of Federal Reserve interest rate hikes. Investors are closely monitoring geopolitical tensions in the Middle East and upcoming central bank policy meetings.
Why it matters
Fluctuations in gold and oil prices significantly impact global inflation forecasts and central bank monetary policy.
Gold extended losses on Friday after falling 2% in the previous session, as Brent crude's move back above $100 a barrel stoked inflation concerns and strengthened the case for higher interest rates ahead of a Federal Reserve policy meeting next week.
Spot gold eased 0.5% to $4,027.54 per ounce by 0523 GMT, with prices down more than $130 from a two-week high hit on Wednesday.
US gold futures for August delivery were 0.5% lower at $4,029.60. Bullion was still on track for a small weekly gain of 0.3% though.
"In the short term, we expect more volatility... gold has been trading between $3,980 all the way to about $4,170 and has been stuck in this way for weeks. Every time prices hit close to $4,000 or slightly below, we see that there will be big buyers coming to buy it back up," said GoldSilver Central Managing Director Brian Lan.
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