Post-Market: Oil Surge Boosts Rate Hike Expectations, Gold Dips Below $4,300

Gold prices fell on Tuesday (15th). The main reason was the surge in oil prices, which raised concerns about inflation and strengthened expectations of a U.S. interest rate hike. The dollar and U.S. Treasury yields rose, while non-interest-bearing gold fell.

Spot gold fell 0.1%, trading at $4,293.29 per ounce, marking the lowest since August 7.

U.S. gold futures closed 0.4% lower, trading at $4,332.80 per ounce.

Daniel Pavilonis, senior market strategist at StoneX, said, "Rising energy prices will lead to more inflation. Higher inflation could push up interest rates. This is unfavorable for gold... Gold is currently in a range-bound trading pattern. If interest rates continue to rise, gold prices could face further selling pressure."

Traders are awaiting the Fed's interest rate decision to be announced at 2 p.m. Eastern Time on Wednesday (2 a.m. Taiwan time on Thursday). Financial markets are betting that Fed officials will raise rates by 25 basis points to the 3.75-4.00% range and signal further tightening ahead.

Pavilonis said, "I think a lot of the rate hike panic has already been priced in... It really depends on what the Fed says afterward. Will they continue to raise rates? Or will they wait and see? Overall, this is not a good sign for gold."

The strengthening dollar makes dollar-denominated gold more expensive for holders of other currencies. Meanwhile, the U.S. 10-year Treasury yield rose to its highest level since 2007.

Gold is traditionally seen as a hedge against inflation and geopolitical uncertainty, but when risk-free U.S. Treasury yields rise, the appeal of non-interest-bearing assets like gold diminishes.

ING analysts in a report said, "Most of the Fed's hawkish risks have already been priced in. However, if policymakers signal that rates will remain high for a longer period, gold could still face pressure."

Oil prices surged by more than $3, and shipping industry sources reported that oil loading operations at Saudi Arabia's Red Sea port of Yanbu have been temporarily suspended. With Libya also halting operations at three oil fields, market concerns about potential disruptions to key oil supply routes for weeks have intensified.

Other Precious Metals Trading

Spot silver rose 0.3%, trading at $63.41 per ounce.

Spot platinum rose 0.7%, trading at $1,772.32 per ounce.

Spot palladium rose 0.1%, trading at $1,294.14 per ounce.