Gold falls 1 per cent as traders weigh Fed signals, await US inflation data
Gold prices fell 1 per cent on Thursday after the US Federal Reserve left rates unchanged and traders priced in an 83 per cent chance of a December hike, while markets awaited key US inflation data. A senior analyst said the Fed outcome triggered bearish positioning, and gold would remain under pres
Gold prices fell 1 per cent on Thursday as investors assessed signals from the US Federal Reserve and Chair Kevin Warsh after policymakers left interest rates unchanged, while awaiting key US inflation data later in the day for further clues on the rate outlook.
Spot gold slid 1.1 per cent to US$4,024.22 per ounce by 0618 GMT, while US gold futures for December delivery dropped 0.4 per cent to US$4,035.90. Bullion is on track for its second straight monthly fall.
The Federal Open Market Committee outcome and Kevin Warsh's remarks triggered fresh bearish positioning in early Asian trade, said Kelvin Wong, a senior market analyst at OANDA.
The Fed held rates steady on Wednesday, in the 3.75 per cent-4.00 per cent range, as expected, opting to delay any changes to borrowing costs until after next week's US midterm elections while it awaits further data on inflation. Traders are now pricing in about an 83 per cent chance of a rate hike in December, according to the CME's FedWatch tool. Higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal.
Markets await Personal Consumption Expenditures data, the Fed's preferred inflation gauge, which is due at 1230 GMT.
On the geopolitical front, US Vice President JD Vance sent a letter to Iranian Security Council chief Mohsen Rezaei in a bid to revive peace negotiations, the Wall Street Journal reported on Wednesday. Oil prices fell on the news. Gold would remain under pressure in the absence of a clear resolution to the conflict in the Middle East, Wong added.
Elsewhere, China's net gold imports via Hong Kong in September rose more than 28 per cent from August to a five-month high, Hong Kong Census and Statistics Department data showed on Wednesday. Among other metals, spot silver fell 2.3 per cent to US$52.71 per ounce, platinum dropped 1.8 per cent to US$1,511.02 and palladium slid 0.5 per cent to US$1,006.03.