Gold gains ground as crude slumps ahead of Fed decision

Gold extended gains in regional trading as crude oil prices retreated, offering support to the safe-haven asset ahead of critical US monetary policy decisions expected this week. The move came as market participants reassessed economic outlooks and central bank trajectories in light of softer energy prices.

The yellow metal has struggled through September, posting a decline of approximately 3 per cent for the month as traders recalibrated expectations surrounding Federal Reserve rate policy. However, recent weakness in petroleum markets prompted a reassessment of broader economic conditions, lifting gold from its monthly lows.

Investors in Singapore and across the Asia-Pacific region are closely monitoring developments ahead of the Fed's next policy statement, which is anticipated to provide fresh guidance on interest rate trajectories. The central bank's decisions carry significant implications for gold valuations, as higher US rates typically reduce the appeal of non-yielding assets, while lower rates tend to support precious metal prices.

Energy market weakness has traditionally signalled economic headwinds, prompting some funds to rotate back into defensive holdings. Analysts noted that the interaction between crude oil trends and monetary policy expectations will likely remain a key driver of precious metals pricing in coming sessions.