Gold: Oil-driven rate repricing weighs on bullion – ING

ING commodities strategists Warren Patterson and Ewa Manthey say Gold has slipped to a two‑week low below $4,300/oz as higher Oil prices revive concerns over US inflation and limit near‑term Federal Reserve easing. They note recent profit‑taking but argue medium‑term support from lower rate expectations, central bank buying and persistent geopolitical uncertainty.

Safe-haven metal consolidates gains

"Gold prices eased to a two-week low, slipping below $4,300/oz, as escalating tensions in the Middle East push oil prices higher. This prompted markets to reassess the outlook for US interest rates. Rising energy costs could add to inflationary pressures and reduce the scope for near-term Federal Reserve easing, weighing on non-yielding assets such as gold."

"The decline follows a strong August rally, with gold gaining nearly 10% and recording its biggest monthly increase since January. Safe-haven demand and growing concerns over US fiscal sustainability have continued to underpin investor interest in gold and other hard assets."

"While near-term profit-taking could continue after gold's recent run-up, broader fundamentals remain supportive. Expectations of lower rates over the medium term, central bank purchases and elevated geopolitical uncertainty should provide a floor for prices. Any pullbacks are likely to attract fresh buying interest."