Gold rises as oil falls ahead of US Federal Reserve meeting

US gold futures for December delivery increased 0.69% to $4066.40.

Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, said, "Lower oil prices will likely support gold prices because it calms inflation fears and may somewhat ease the Federal Reserve's readiness to tighten monetary policy."

He added, "I think the market is currently being influenced by news from the Middle East and the ongoing negotiations."

Oil futures fell by more than 1% today as attention turned to peace talks in the Middle East, but prices remain near their highest levels in several months.

However, Jim Wyckoff, a market analyst at the US Gold Exchange, said, "If crude oil prices continue to rise, it will lead to a price inflation problem and push central banks to tighten their monetary policy. This is negative for gold."

Policymakers have indicated they will not raise interest rates this week, but with the focus remaining on persistent inflation concerns, investors believe this pause will not last long.

The CME FedWatch tool shows that traders are pricing in an 83% probability of a US interest rate hike in December.

Higher interest rates increase the opportunity cost of holding non-yielding gold.

Investors are also awaiting US personal consumption expenditures data scheduled for release on Thursday, an indicator closely watched by the Federal Reserve as it seeks to achieve its 2% inflation target.

As for other precious metals, silver rose 0.8% in spot transactions to $54.37 per ounce after reaching its lowest level in nearly a year. Platinum rose 0.3% to $1531.95 after falling to its lowest level since late November. Meanwhile, palladium fell 1.4% to $1035 after dropping to its lowest level since June 2025 earlier in the session.