Shafaq News

Gold struggled for ​momentum on Tuesday as expectations of interest rates staying higher for longer ‌weighed on sentiment, with investors awaiting comments from US Federal Reserve officials for policy clues.

Spot gold was little changed at $4,342.41 per ounce by 0454 GMT. US gold futures fell 0.1% to $4,379.30.

Bullion is ​traditionally viewed as a hedge against inflation and geopolitical risks, but its ​appeal tends to wane in a high-interest-rate environment as investors favour ⁠yield-bearing assets.

With US economic data limited this week, investors will focus on comments ​from Fed officials for signs of whether the central bank is leaning toward another ​rate increase in October, as well as on crude oil prices, said Chris Weston, head of research at Pepperstone.

"While crude has come modestly off its recent highs, a reversal higher that builds ​inflation expectations would only intensify the rates story, and gold would likely continue to ​face headwinds," said Weston.

The Fed raised its policy rate by a quarter of a percentage point ‌last ⁠week and flagged more hikes in the coming months.

The US central bank will likely need to hike rates further to lower inflation resulting from strong demand as well as a commodity price shock that has moved beyond oil, St. Louis Fed President Alberto ​Musalem said, adding ​that it would ⁠be better for the Fed to act sooner than wait.

On the geopolitical front, Houthi fighters pushed to seize strategic heights in Yemen ​to cut off the Red Sea coast from remaining areas held ​by Saudi-backed ⁠forces, after a report that US President Donald Trump had called off American strikes on the group at the last minute.

Oil prices gained for the first time in ⁠five sessions ​as investors awaited developments on potential US-Iran talks ​at the United Nations General Assembly this week.

Spot silver fell 0.1% to $65.99, platinum lost 0.6% to $1,786.43 and palladium declined ​0.4% to $1,296.40.

(REUTERS)

Only the headline is edited by Shafaq News.