Gold lacklustre as higher-for-longer rate outlook weighs on sentiment
- US gold futures for December delivery were up 0.2% at $4,383.10
Gold prices eased as major central banks signal prolonged higher interest rates to combat inflation, diminishing gold's appeal against interest-bearing investments.
- Central bank interest rate policies and inflation.
- Geopolitical risks and central bank gold demand.
- 2026 gold price forecast and market drivers.
Gold prices eased on Wednesday as investors weighed the prospect of major central banks keeping interest rates elevated for longer in their efforts to curb persistent inflation. Spot gold fell 0.2% to $4,345.55 per ounce, as of 0435 GMT.
US gold futures for December delivery were up 0.2% at $4,383.10.
The dollar steadied near its strongest level in two months.
A firmer dollar makes greenback-priced bullion more expensive for overseas buyers.
“Short-term volatility in gold very much depends on how oil trades and the developments that happen in the Middle East.
However, long-term structural drivers for gold are still really strong,“ said Kyle Rodda.
While bullion is often seen as a safeguard against inflation, its appeal tends to wane when elevated rates boost returns on interest-bearing investments.
US President Donald Trump warned that he could annihilate Iran if there is no deal to end the war, but also suggested an agreement could come soon amid a diplomatic push at the United Nations.
Boston Federal Reserve President Susan Collins wrote in a Linkedin post that she supported the US central bank’s decision last week to raise interest rates in the face of risks that future inflation will be above the 2% target.
Collins, who is not a voting member of the rate-setting Federal Open Market Committee this year, did not say if she wants rates to go up again.
The Fed last week lifted its benchmark rate by 25 basis points to 3.75%-4.00% and signalled another increase could come before year-end.
The Bank of Japan and the European Central Bank have also raised rates recently.
Analysts at BMI maintained their 2026 gold price forecast at an average of $4,400 per ounce, noting that elevated geopolitical risks and continued central bank purchases are expected to ensure a strong floor under gold around the $3,800 level.
Among other metals, spot silver fell 0.6% to $66.70 per ounce, platinum lost 1% to $1,815.11 and palladium declined 0.5% at $1,301.60. ‑Reuters
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