Gold slides as costlier oil revives inflation worries before US midterms

what happened

Reuters reports that gold dropped on Tuesday after a roughly 2% gain in the prior session. Investors stayed cautious as energy-driven inflation concerns mounted ahead of the US midterm vote.

Spot gold was down 1.1% at $3,903.48 an ounce at 1202 GMT, while December US gold futures fell 1.4% to $3,913.80. Crude rebounded after a sharp drop the day before, with an Iranian official saying Tehran and Washington were still well apart on ending the conflict, and the US striking Qeshm Island in Iran.

Silver, platinum and palladium also declined, with silver off 3.3% at $48.96, platinum down 1.9% at $1,421.43 and palladium lower by 3.1% at $939.41.

why it matters

Pricier crude feeds expectations of tighter Federal Reserve policy, and CME's FedWatch tool shows traders assigning a 76% chance of a December rate hike. Higher rates raise the cost of holding bullion, which pays no interest. The World Gold Council, meanwhile, cut its 2026 gold investment growth forecast to 200 metric tons from 400 tons, citing weaker demand for bars and coins, but raised its estimate for central bank purchases.

market impact

Gold: costlier oil lifts Fed rate expectations and pressures the metal

• ▼Gold pressure down — higher rate expectations raise the opportunity cost of holding non-yielding bullion
• ▼Silver pressure down — broader precious metals pressure from expectations of tighter monetary policy

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