Gold regained some ground on Wednesday morning after the sharp selloff the previous day. By about 8:00 a.m. Central European Time, the most actively traded December futures contract had risen $40.00 to $4,070.20 per troy ounce, according to market data. The precious metal thus held above the technically significant $4,000 threshold.
The prior decline was triggered by unexpectedly high US inflation data for October, which reinforced expectations of further monetary tightening. Futures markets now fully price in a Federal Reserve rate hike in December, with some even discussing a larger move than previously assumed. Several Fed officials had recently stressed the need for further rate increases to curb persistent inflation pressure. Higher bond yields and a firmer dollar weigh on gold because they raise the opportunity cost of holding the non-yielding metal.
By contrast, continued central bank demand and interest in safe-haven assets are providing stability. In the short term, however, gold’s direction is likely to depend above all on the further course of US inflation and rate expectations.
A different picture is emerging in the oil market, which is recovering from two-month lows. Mounting attacks on commercial ships in the Strait of Hormuz are bringing risks to global supply back into focus. In October alone, 37 ships were attacked there—more than in any other month since the Middle East war began—and the wave of attacks continued in November. Hopes for a diplomatic solution to the Iran war had previously weighed on prices, but Iranian government representatives disputed the account that talks with Washington were already underway. Even in the event of a deal, naval mines, high insurance costs and security concerns could hamper the resumption of regular tanker shipments. Additional uncertainty is being caused by Ukrainian drone strikes on Russian energy facilities, including the Baltic Sea port of Ust-Luga, while industry data point to significant constraints on Russian refinery capacity. By contrast, reports of sharply higher US crude inventories weighed on prices; according to the weekly API report, they rose by nine million barrels.
On Wednesday morning, the next-dated WTI futures contract gained $0.36 to $86.40, while Brent rose $0.77 to $92.26.
For investors, the picture remains split: on one hand, geopolitical uncertainty supports demand for hedging; on the other, the tighter monetary policy environment weighs on gold. Observers are therefore likely to focus above all on the next inflation data and signals from the US Federal Reserve to assess the further direction of precious metals and energy markets.
| Metric | Level (8:00 a.m. CET) | Change |
|---|---|---|
| Gold futures (December) | $4,070.20/oz | +$40.00 |
| WTI futures (next-dated) | $86.40/barrel | +$0.36 |
| Brent futures | $92.26/barrel | +$0.77 |
| US crude inventories (API) | +9 million barrels | – |
Note: Gold and oil figures refer to early trading on Wednesday morning (CET).