Mubasher: Gold prices declined on Wednesday as investors anticipated hints on the US Federal Reserve’s monetary policy easing approach, while demand for safe-haven metal was dampened by a retreat in oil markets, according to Reuters.
By 10:45 am GMT, spot gold ticked down by 0.02% to $1,501.05 per ounce, while US gold futures fell by 0.30% to $1,508.80 per ounce.
Concerns among investors were that the reassuring news on Saudi Arabia’s crude supply would dissuade the Fed from further interest rate cuts. The Fed’s two-day meeting ends later in the day.
After strikes against the oil processing facility at Abqaiq and the Khurais oilfield in the weekend, knocking out more than half of the Saudi Arabia’s output, Energy Minister Prince Abdulaziz bin Salman on Tuesday stated the kingdom would restore its full production by month-end.
In addition, risk-taking appetite in the market caps demand for safe-haven assets, which are seen as alternative during times of geopolitical and economic uncertainties.
The higher crude oil prices, the more likely inflationary risks are, according to Argonaut Securities analyst Helen Lau.
With Saudi Arabia’s reassuring announcement, “there is not such an inflation risk as before,” Reuters quoted Lau as saying.
Meanwhile, geopolitical tensions in the Middle East remained to be seen supportive to the yellow metal.
The US believed that the attacks on the Saudi Aramco's oil installations originated from southwestern Iran, which could up the ante between Tehran and Riyadh, Reuters reported on Tuesday citing a US official.
“The US administration continues to have a problem, they want Iran to take responsibility, [which is] why gold prices are holding up quite well,” Lau said.