Gold price steadies ahead of US elections - Mining.com.au

AI desk brief

Article summary

Gold steadied near US$3,950/oz at 8:20am ET on Tuesday after falling more than 1% and briefly trading below US$3,900, as renewed oil-price strength and US midterm-election uncertainty weighed on sentiment. The article reports traders assigned roughly a 76% probability to a December Federal Reserve rate hike; WisdomTree strategist Nitesh Shah linked gold’s pressure to oil-driven inflation and higher rate expectations. The World Gold Council cut its forecast for this year’s growth in gold investment demand to 200 tonnes from 400 tonnes, citing weaker bar-and-coin appetite, but raised its central-bank purchase forecast without specifying a figure. WGC strategist John Reade characterised potential congressional changes as increasing uncertainty rather than establishing a directional gold effect.

Market implications · analysis

The reduced investment-demand growth forecast could weaken a source of bullion support over the article’s annual forecast horizon, although stronger official purchases could offset some of that weakness; their unspecified scale prevents a net-demand estimate. Near term, oil-driven tightening expectations could pressure gold if expected real yields rise, but nominal rate expectations alone do not establish that outcome. Further technology-stock losses could also trigger gold liquidation, as the quoted analyst warns. Confidence in a directional near-term conclusion is limited by these competing channels.