- Gold slips for a fourth straight session
- Brent crude touched $111.99/bbl on Tuesday, highest since May 20
- FOMC interest-rate decision meeting on October 27-28
- Fed likely to skip raising rates next week - Reuters Poll
Oct 21 (Reuters) - Gold prices held steady on Wednesday after touching their lowest level in nearly a week, as a rally in oil prices revived inflation concerns while investors awaited next week's Federal Reserve meeting for clues on the interest rate outlook.
Spot gold was at $4,127.53 per ounce by 1045 GMT after hitting its lowest since October 15 in earlier trade.
U.S. gold futures for December delivery rose 0.1% to $4,145.70 per ounce.
"Gold has adhered to the downtrend that began 2 months ago on persistent expectations that more Fed rate hikes are in store," said Han Tan, chief market analyst at Bybit.
While gold has long served as an inflation hedge, its lack of yield makes it less attractive when interest rates rise.
Nearly all economists surveyed by Reuters expect the Federal Reserve to hold interest rates steady this month before delivering a hike in December, as policymakers opt for patience despite persistent inflation pressures that would otherwise call for stronger action.
"Despite the expected pause at next week's FOMC meeting, Fed funds futures are fully pricing in one more 25-bps hike before the year comes to a close, with two more hikes expected by mid-2027," Tan added.
Markets are also waiting for US Personal Consumption Expenditures data next week, the Fed's preferred gauge to monitor its 2% inflation target.
Hotter-than-expected consumer and producer inflation data last week showed that US price pressures remained elevated on soaring energy prices.
Oil prices gained more than $1, with Brent futures holding above $110 a barrel, as escalating Middle East tensions fuelled fears of supply disruptions.
Elsewhere, UK inflation hit an 11-month high of 3.5% in September, keeping the Bank of England on track to raise rates in November.
Among other metals, spot silver slid 0.7% to $57.6 per ounce, platinum fell 0.4% to $1,642.25 and palladium dropped 1% to $1,091.87.
Reporting by Vishak Mathew in Bengaluru; Editing by Shailesh Kuber
Source: Reuters