Gold prices experienced a modest increase during early Asian trading on Wednesday, as declining oil prices alleviated inflation worries. Meanwhile, investors remained attentive to the outcomes of the US midterm elections and significant labour market data for insights into policy direction. Spot gold increased by 0.2% to $3,934.75 per ounce at 0024, while US gold futures for December delivery saw a rise of 0.1% to $3,943.20.
Oil prices declined approximately 1% on Tuesday, reaching their lowest level in nearly four weeks. This movement in the market reflects a balancing act between discussions aimed at resolving the conflicts in Ukraine and Iran, and concerns that recent hostilities in both regions may exacerbate supply disruptions. Russia will conduct three-way peace negotiations with Ukraine and the United States in Abu Dhabi on November 10-11, as confirmed by the Kremlin on Tuesday. Iran and the United States remain distant from reaching an agreement to conclude their conflict, a high-ranking Iranian official informed Reuters on Tuesday.
Meanwhile, mediator Qatar has intensified its efforts to reconcile differences and prevent a resurgence of tensions following the US midterm elections. Lower oil prices alleviate inflation worries and strengthen the belief that the Federal Reserve might not have to maintain high interest rates for a prolonged duration, enhancing the attractiveness of non-yielding bullion. Investors were preparing for a potentially robust performance by the Democrats in Tuesday’s midterm elections, which could lead to increased volatility in asset prices.
Traders currently perceive a 78% probability that the Federal Reserve will increase interest rates in December, as indicated by CME’s FedWatch tool. In other developments, the World Gold Council indicated on Tuesday that India’s gold demand is projected to decline to a six-year low in 2026, driven by high prices impacting jewellery sales and a moderation in investment demand. Among other metals, spot silver declined by 0.2% to $49.67 per ounce, while platinum experienced an increase of 0.3% to $1,422.15, and palladium saw a rise of 0.5% to $938.49.
