Gold prices rose on Tuesday as falling oil prices eased concerns over energy-driven inflation and reduced expectations that central banks would need to tighten monetary policy aggressively in the near term.
At 16:52 WIB, spot gold rose 0.3% to $4,151.89 per troy ounce, while gold futures gained 0.5% to $4,179.15 per troy ounce.
The decline in oil prices came as hopes grew that crude oil supplies from the Middle East could gradually return to global markets. According to shipping data cited by Reuters, Gulf oil exporters exceeded pre-war levels for much of September.
Kpler data showed that the seven-day moving average of crude oil exports from the region reached 18.3 million barrels per day as of September 30. Export volumes remained above pre-war levels for 14 days last month, despite ongoing security risks in the region.
Expectations that crude oil supplies could resume have continued to increase, although the threat of attacks on tankers and other commercial vessels remains elevated.
Iran almost completely closed the Strait of Hormuz after the outbreak of the conflict, disrupting a vital shipping route that previously handled around one-fifth of global oil and liquefied natural gas supplies. The conflict has since spread to other parts of the Gulf, including Yemen, where Iran-backed Houthi militants and Saudi-backed government forces are competing for control of the Bab el-Mandeb Strait, another key shipping route.
Meanwhile, improving oil flows from the Gulf, combined with a commitment from the Group of Seven (G7) to release emergency energy reserves, has helped ease some concerns over global energy supplies. Brent crude futures edged lower, with the benchmark contract last trading at around $99.50 per barrel.
Weaker Jobs Data Supports Gold
Alongside weaker-than-expected US employment data, moderating oil prices could reduce pressure on the Federal Reserve to raise interest rates soon to contain persistent inflation.
The Fed is currently expected to hold interest rates steady at its October meeting before potentially raising borrowing costs in December. Minutes from the Federal Reserve's September meeting, when policymakers raised interest rates for the first time in three years, are due later this week and could provide further clues about the central bank's policy outlook.
Expectations for a delayed rate hike could benefit gold by reducing the opportunity cost of holding the non-yielding asset. Lower US Treasury yields following another sell-off on Monday also provided additional support for gold prices.
At the same time, the US Dollar Index, which tracks the greenback against a basket of major currencies, edged lower. A weaker dollar generally makes gold more attractive to international buyers because the precious metal becomes cheaper in other currencies.
ANZ analysts said gold had recovered from last week's sharp decline as investors reassessed rising global fiscal pressures. They also highlighted lower interest-rate expectations following weaker payroll data.
Markets are now pricing in roughly a 20% probability of an October rate hike, down sharply from around 70% a week earlier. The shift in expectations has helped improve sentiment toward gold as investors reassess the outlook for US monetary policy and inflation.
