Gold Rises 0.50% as Oil Slips Toward $114 Ahead of Tehran Talks

Gold and silver rose at the start of U.S. trading on Monday, as falling oil prices eased some inflation fears and reduced pressure on precious metals. Spot gold traded at $4,014.49 per ounce, up 0.50%, and silver at $53.990, up 0.20%, according to a Kitco News report.

Brent crude fell toward $114 per barrel as immediate concerns over Gulf supply eased and investors awaited talks in Tehran involving delegations from Saudi Arabia, Pakistan and Turkey, while West Texas Intermediate (WTI) remained above $100. The gain recovered part of gold's losses after it dropped to $3,975 on Friday, its lowest level since July 20.

Data showed that the preliminary flash Composite Purchasing Managers' Index (PMI) for October fell to 57.6 from 58.4 in September, while the manufacturing index rose to 56.0 from 55.9, the services index declined to 57.9 from 58.8, and selling prices recorded their fastest pace of increase since August 2022. The final reading of the University of Michigan consumer sentiment index was revised up to 48.0 from 46.3 in the preliminary reading, but remained below September's level of 48.1. Year-ahead inflation expectations rose to 4.7% from 4.6%, and longer-term expectations rose to 3.5% from 3.4%.

Interest rate futures indicate a nearly 90% probability that the Fed will leave rates unchanged at the conclusion of its meeting on Wednesday. The report sees gold's next resistance between $4,032 and $4,075, and its support between $3,963 and $3,946, amid continued uncertainty over the Strait of Hormuz.

What Do These Terms Mean?

Spot Gold: The trading price of gold in the physical market for immediate delivery, differing from gold futures contracts that are settled at a later date.

Purchasing Managers' Index: A monthly survey of company managers on output, orders and hiring, used to gauge economic activity before official data are released.

Resistance Level: A price level at which a metal struggles to rise above because many investors sell at that point; breaking through it may open the way for further gains.