Gold prices in trading on Monday increased by 1.4% to $4,122 per ounce, influenced by falling oil prices and easing inflation concerns. Meanwhile, the price of gold per ounce in the U.S. futures market for delivery in December also rose by the same amount to $4,132.70.
Upward Trend in Precious Metals Market
There was also an upward trend in other precious metals. The price of silver per ounce increased by 2.5% to $53.15, platinum per ounce rose by 1.3% to $1,553.23, and palladium per ounce increased by 2.1% to $1,045.11. These price increases are attributed to the decline in the value of the U.S. dollar and fluctuations in the oil market.
Impact of Falling Oil Prices on Demand
The decrease in oil prices has helped ease inflationary pressures and reduced expectations for sustained high interest rates. This situation lowers the opportunity cost of holding gold as a non-yielding asset, leading to increased demand for it. In this context, recent labor market statistics from the U.S. in October showed that employment growth has accelerated and the unemployment rate has decreased to 4.1%. This reflects the strength of the U.S. economy.
Market participants and traders now estimate, based on the CME FedWatch Tool, an approximately 81% chance of an interest rate hike by the Federal Reserve in the December meeting. The market's main focus is now on the release of the Consumer Price Index (CPI) on Tuesday and the Producer Price Index (PPI) on Friday to gain a more accurate assessment of the Federal Reserve's monetary policy path.
Market analysts warn that if inflation statistics exceed expectations, a strengthening dollar and the possibility of an interest rate increase could put new downward pressure on gold prices. Therefore, investors should be cautious of changes in economic statistics and their impacts on the gold market.
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