Gold reversed its early losses on Tuesday, October 27, rising by about 1% to $4,056 an ounce in US trading at 6:13 PM Saudi time. Shortly afterward, Trading Economics showed a price near $4,062, compared to levels around $4,000 earlier in the session. fxstreet.com
The rebound coincided with a drop in oil prices, temporarily easing concerns about further inflationary pressures ahead of the Federal Reserve's decision. West Texas Intermediate crude fell below $100 a barrel, while Brent crude declined nearly 1.8% to around $113.70. Market sources attributed gold's recovery to lower energy prices and some demand at lower levels, rather than a clear shift in interest rate expectations. fxstreet.com
The move is particularly significant because it occurred despite a strong dollar; the dollar index rose to around 102.25, near a two-week high, while the yield on the benchmark 10-year US Treasury note remained close to 5%. These two factors typically put downward pressure on gold, suggesting that the decline in oil prices and short-covering had a greater impact during the US session. fxstreet.com
Silver also recovered to the $54 level after falling to near an 11-month low earlier in the day, trading near $54.50, up about 1%. Both metals thus reversed their direction during the session, but this movement remains a short-term pullback ahead of a major financial event and is not enough on its own to confirm a trend reversal.
The Federal Reserve will announce its decision on Wednesday, October 28, following its meeting on October 27 and 28, as per the official schedule. Markets expect interest rates to remain unchanged, while the possibility of a December rate hike remains the most significant factor for gold and silver. A hawkish tone could put renewed pressure on the metals through the dollar and yields, while a confirmation of a wait-and-see approach to assess data could help solidify the recovery.
