Gold Slips as Investors Weigh Fed Rate Outlook
Rising oil prices lifted inflation expectations and pushed US yields higher, leaving spot gold down 0.6% to $4,000.59 an ounce, Reuters reported.
- Spot gold edged higher on Monday as traders recalibrated rate hike bets following recent volatility. Bullion traded between $4,118 and $4,141 this week amid persistent inflationary pressures and the Federal Reserve's upcoming policy meeting.
- Elevated energy prices and persistent inflation have reinforced expectations of further monetary tightening, increasing the opportunity cost of holding non-yielding gold. These factors prompted traders to price in a 90% likelihood of a Fed rate increase in December.
- Bullion prices remain roughly 29% below their late-January record, trading around $4,118 per ounce on Wednesday. Analysts note that higher Treasury yields and a stronger dollar have curtailed recovery attempts, leaving prices vulnerable to further selling pressure.
- Investors are closely monitoring Thursday's Personal Consumption Expenditures price index release, the Fed's preferred inflation gauge. This data alongside the central bank's policy decision on Wednesday will determine whether bullion stabilizes or faces further declines.
- Markets widely expect the Fed to skip a rate hike at its October 27–28 meeting while keeping a December increase on the table. Strong economic growth and persistent inflation leave policymakers with limited room to signal a shift in stance.
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Gold rose more than 1 percent on Tuesday as falling oil prices eased inflation concerns. The market is focused on the Federal Reserve's interest rate decision this week, with investors looking for clues about the central bank's path to interest rates.
Global gold prices are back in the spotlight after falling below the psychological level of US$4,000 per troy ounce.
Gold Under Pressure as Oil-Driven Inflation Fears Reshape Federal Reserve Expectations
Gold enters the final week of October facing renewed selling pressure as rising energy prices, persistent inflation concerns and shifting expectations for US monetary policy challenge the precious metal's traditional appeal as a safe-haven asset...
The price of Brent's North Sea barrel, for delivery in December, lost 0.78 percent, up to $115.81, after falling during the session to a minimum of $114. Its American equivalent, the West Texas Intermediate barrel (WTI), for delivery in the same month, fell back 1.46 percent, up to $101.76.
<p>Gold Holds Above $4000 Per Ounce — Investors Await US Fed Decision Gold price stands at $4011.58 per ounce ahead of Fed decision. Traders estimate the likelihood of a rate hike this week in That's 10%.</p>
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