Solid Gold Berjangka – Gold prices (XAU/USD) strengthened during Asian trading on Wednesday (Oct 14), hovering around US$4,160 per troy ounce. Gold's movement remained limited as market participants opted to await the release of US inflation data before taking aggressive new positions.
The market's primary focus is on the US Consumer Price Index (CPI) report due today, followed by the Producer Price Index (PPI) on Thursday. Investors are also anticipating a speech by Federal Reserve official Kevin Warsh at the IMF and World Bank annual meeting in Bangkok on Friday, seeking further clues regarding the direction of US monetary policy.
Expectations regarding Fed policy continue to pose a challenge for gold. According to the CME FedWatch Tool, the market sees a nearly 90% probability that the US central bank will raise interest rates again at its December meeting. These expectations intensified after several FOMC officials made hawkish comments, opening the door for further tightening before year-end.
Inflationary pressure from the energy sector is also a point of concern. Crude oil prices have risen toward their highest levels in nearly two weeks amid supply fears driven by escalating conflict in the Middle East. Rising energy prices could keep inflationary pressure high and reinforce the case for the Fed to maintain a tight monetary policy for longer.
Geopolitical risks are also supporting gold as a safe-haven asset. Fighting between the Iran-aligned Houthi group and Saudi Arabia has intensified over the past week, with reports of attacks targeting energy facilities and fuel reserves in Yemen. Tensions between the US and Iran around the Strait of Hormuz also remain high, sustaining a geopolitical risk premium in the market.
Meanwhile, the US dollar index weakened for the second consecutive day—after previously hitting its highest level since April 2025—providing some breathing room for gold to hold its ground. However, expectations of Federal Reserve interest rate hikes and persistent inflation risks are limiting the potential for gold to rally. Market participants are expected to await the CPI results as a key catalyst to determine whether XAU/USD can break out of the consolidation range seen over the past two weeks. (srh)