Gold prices slipped toward $4,100 per ounce on Wednesday, extending their losing streak to a fourth consecutive session as rising oil prices intensified inflation worries and reinforced expectations of further interest rate hikes. Crude resumed its upward climb after a diplomat dismissed reports that a breakthrough deal to end the US–Iran conflict was imminent, even though negotiations are still in progress.
Heightened tensions in the Middle East and Eastern Europe, along with an uptick in attacks on tankers in the Strait of Hormuz, have added to concerns about potential supply disruptions.
In monetary policy, the US Federal Reserve is widely expected to keep interest rates unchanged next week, though markets are pricing in the possibility of a rate increase in December. The Bank of Japan is similarly projected to hold its policy rate steady next week, with a potential hike also anticipated in December.
While gold has long been viewed as a hedge against inflation, rising interest rates typically diminish its relative appeal compared with interest-bearing assets.
