Gold steadied near a one-week low on Wednesday, hovering at $4,133.48 per ounce by 09:10 a.m. EDT (13:10 GMT), as a rally in oil prices stoked inflation fears linked to Middle East tensions and investors looked ahead to next week's Federal Reserve meeting, Reuters reported. The metal had fallen for a fourth straight session earlier in the day, touching its lowest level in nearly a week, Reuters said — yaani, one ounce of gold was trading at roughly ₹3.90 lakh at the day's rupee rate of about ₹94.45 to the dollar.
The pressure on gold is coming through oil. Brent crude pushed back above $110 a barrel on Wednesday as traders weighed supply risks around the Strait of Hormuz and attacks on shipping, and higher energy prices feed directly into inflation expectations. When inflation looks stickier, markets expect interest rates to stay higher for longer, which raises the cost of holding gold — a metal that pays no interest — and strengthens the dollar, both of which weigh on bullion.
A Reuters poll of 100 economists published this week found 94 expect the Federal Reserve to hold its policy rate in the 3.75% to 4.00% range when it meets on October 27–28, while every respondent expects a rate increase in December — a sharp reversal from last month, when fewer than half predicted a move before year-end. Fed Chair Kevin Warsh has declined to signal how policymakers will vote at the October meeting, Reuters reported.
Other market trackers recorded the same pattern on Wednesday: gold fell about 0.3% to near $4,114 an ounce in intraday trade, with a low around $4,106, TradingKey reported, while the Hindu Business Line's market live blog put gold at $4,119.54 an ounce, down 0.14%, alongside a firmer dollar index near 101.8. Analysts say central-bank buying and Asian investor demand remain a floor under prices over the longer term, but in the near term the Fed's path — and oil — are driving the trade.
Sources: Reuters via TradingView, October 21; Reuters poll of economists via QNC News, October 21; TradingKey market report, October 21; The Hindu Business Line markets live, October 21.