France's economy grew by 0.1% in the third quarter. - France's economy grew by just 0.1% in the third quarter,
IMF maintains global economic growth forecast for 2027 at 3.4% - The IMF has maintained its global economic growth forecast for 2027 at 3.4%, warning that the conflict in the Middle East and rising government debt pose threats to economic prospects.
The escalation of the conflict in the Middle East continued to raise concerns about energy supply disruptions, persistent inflation, and the prospect of further interest rate hikes.
Gold prices rose on Tuesday as a weaker US dollar supported the precious metal.
At 07:32, XAU/USD rose 0.5% to $4,191.76 per ounce, while gold futures gained 0.6% to $4,215.87. XAG/USD climbed 0.3% to $60.5000 per ounce, and XPT/USD rose 0.3% to $1,697.26. XPD/USD increased 0.4% to $1,147.50. The US Dollar Index fell 0.2% to 102.43.
Middle East tensions keep oil prices high and weigh on gold
Gold traded near $4,160 per ounce following a 0.5% drop in the previous session. Brent crude approached $106 per barrel as attacks by Iran-backed Houthi forces on a major Saudi Arabian airport increased pressure on Washington to provide further support to its regional ally.
The spreading conflict has sparked fears that further energy supply disruptions could drive oil prices higher and prolong inflationary pressures. Gold has fallen by roughly one-fifth since the U.S.-Iran conflict erupted in late February, as the conflict fueled global inflation concerns and contributed to a tightening of monetary policy.
Higher borrowing costs typically put pressure on gold, as the non-yielding metal becomes less attractive compared to interest-bearing assets. Persistent inflation and significant government borrowing also keep interest rates and bond yields high, further limiting the precious metal's appeal.
Earlier in the Asian session, spot gold fell to $4,156.27 per ounce. Silver dropped 0.5% to $59.93 per ounce, while platinum and palladium also declined.
Traders await U.S. inflation data amid persistent bets on a Federal Reserve rate hike.
Traders are awaiting the release of U.S. inflation data on Wednesday for clues regarding the Federal Reserve's next move following its decision to tighten policy last month.
Interest rate swaps imply a roughly 20% probability of another hike at the Fed's October meeting, while markets are pricing in one additional rate increase before the end of the year.
Cleveland Federal Reserve Bank President Beth Hammack said on Monday that smaller but more frequent monetary policy adjustments could help anchor inflation expectations. However, she stopped short of explicitly endorsing an interest rate hike in October.
Her remarks came as policymakers grapple with persistent inflation risks and elevated borrowing costs. Further increases in energy prices could complicate the inflation outlook and reinforce expectations that interest rates may need to remain elevated or rise even higher.
Consequently, Wednesday's US Consumer Price Index (CPI) report is likely to serve as a key catalyst for precious metals. Inflation figures exceeding expectations could strengthen the case for further monetary policy tightening and put pressure on non-interest-bearing gold, whereas softer data might alleviate some concerns regarding additional rate hikes.
For now, investors are weighing the impact of Middle East tensions on oil prices and inflation alongside the outlook for Federal Reserve policy—factors that are both likely to influence demand for precious metals.