Gold steady as softer US inflation data tempers Fed rate-hike bets
Elevated yields and lingering tightening risks leave bullion vulnerable to further selling, says an analyst
Gold remained stable in October as softer US inflation data reduced expectations of a Federal Reserve rate hike at their next meeting. The personal consumption expenditure price index, a key indicator of underlying inflation, rose a smaller-than-expected 0.2 per cent in August. Previously released data had also been revised downward.
Long-term Treasury yields surged to record levels due to robust US spending, which increased confidence that the US economy could withstand higher interest rates. After the Fed raised rates for the first time since 2023 and indicated potential further tightening, gold experienced its worst monthly decline since June, losing 6 per cent in September.
Analyst Ewa Manthey from ING Bank noted that while gold benefited from the softer inflation reading, elevated yields and remaining tightening risks continued to put downward pressure on the precious metal. Silver and platinum also fell, while palladium saw a slight decline. The Bloomberg Dollar Spot Index remained relatively flat after experiencing a slight increase the previous day.
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