Gold price slumps 2% as oil spikes to five-month high - Mining.com.au

AI desk brief

Gold slumped more than 2% to around US$4,050/oz as Brent crude jumped to a five-month high near US$112/bbl, reviving inflation fears ahead of next week’s Fed meeting. The move has dragged bullion to its lowest since early August and nearly erased that month’s gains, with higher oil, hotter U.S. CPI/PPI and a stronger case for further Fed hikes weighing on non-yielding metals.

Reuters-cited traders said the market is reacting to rising inflationary pressure and the prospect of continued policy tightening, while broader equity weakness is adding to the risk-off backdrop. Intesa Sanpaolo expects precious metals to remain directionless near term, with gold averaging around US$4,200/oz over the next couple of quarters, but sees jewellery demand contracting sharply.