Gold inches higher as oil falls, US rate-hike fears cap gains
Gold | 2026-06-09 08:24:36
Gold edged higher on Tuesday supported by lower oil prices as tensions eased in the Middle East, but concerns about U.S. interest rate hikes ahead of key inflation data this week capped gains.
By Anil Mathews
June 9 (Reuters) - Gold edged higher on Tuesday supported by lower oil prices as tensions eased in the Middle East, but concerns about U.S. interest rate hikes ahead of key inflation data this week capped gains.
Spot gold was up 0.3% at $4,340.31 per ounce as of 1156 GMT. The metal fell to its lowest level since March 23 in the previous session.
U.S. gold futures for August delivery were unchanged at $4,364.90.
"Gold stabilised after a two-day slump that saw prices break below key technical support... However, rising expectations of further U.S. rate hikes continue to create a challenging backdrop for bullion," Saxo Bank analyst Ole Hansen said.
Oil prices fell after Iran and Israel said they had halted attacks on each other following an appeal from U.S. President Donald Trump.
Elevated crude oil prices stoke inflation risks, increasing the chances of higher interest rates.
Although gold is typically viewed as a hedge against inflation, it tends to lose its appeal as a non-yielding asset in a high-interest-rate environment.
Investors now await May U.S. Consumer Price Index (CPI) data on Wednesday and Producer Price Index (PPI) data on Thursday for clues on the Federal Reserve's next moves after a robust jobs report last week ramped up bets for a rate hike this year.
"Tomorrow's U.S. CPI, which is expected to exceed 4% for the first time in almost three years, and most certainly the 17 June FOMC meeting remains key as the market is looking for the comments and intentions from the new Fed chair," Hansen said.
Traders are now pricing in a 68% chance of a Fed rate hike in December, according to the CME FedWatch tool. FEDWATCH
Spot gold closed below its 200-day moving average on Friday for the first time since October 2023 and has since traded below that level amid rate-hike fears.
"The breakout below the 200-dMA is widely considered a negative technical signal, which points to further downside potential in the near term," analysts at Citi said in a note on Monday.
Spot silver rose 0.6% to $68.56 per ounce, platinum gained 0.9% at $1,769.83, while palladium rose 2.9% to $1,238.66.
