Gold Drops More Than 2% to $4,036 Amid Oil Rally and Fed Anticipation
Gold dropped more than 2% to $4,036.12 per ounce, after touching $4,050 in London, as oil rose to $112 amid anticipation of decisions by the Fed and the ECB.
Gold fell more than 2% on Thursday, touching $4,050 per ounce in London trading, before showing a price of $4,036.12 down 2.16% at 19:03, according to MarketScreener. This brings gold closer to the $4,000 per ounce level.
The drop came after oil prices rose to a five-month high, with Brent crude reaching $112 a barrel, driven by supply shortage fears following a Houthi drone attack on Saudi Aramco's Shaybah field. The source stated that the attack was intercepted without affecting operations at the field.
Rising oil prices increase inflation concerns, a factor that limits the appeal of non-yielding gold. Investors are awaiting interest rate decisions from the US Federal Reserve and the European Central Bank next week.
Spot silver fell nearly 5% to $54.997 per ounce, according to the source.
What do these terms mean?
Ounce: A unit of weight for precious metals equal to about 31.1 grams, and gold is priced globally per ounce.
Brent Crude: A benchmark crude oil extracted from the North Sea and used as a pricing reference for a large portion of global oil.
Interest Rates: The rate central banks charge on borrowing, usually raised to curb inflation, which reduces the attractiveness of non-yielding assets such as gold.
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