Canadian Dollar strengthens as BoC delivers rate hike, US PCE data in focus

Gold prices declined on Thursday as investors analyzed statements from the Federal Reserve and Chair Kevin Warsh following the decision to keep interest rates steady. In contrast to the market's expectations, the central bank opted to postpone any adjustments until after the upcoming US midterm elections while awaiting additional inflation data. The spot price of gold slipped 0.7% to $4,037.98 per ounce by 0410 GMT, with US gold futures for December delivery remaining flat at $4,049.80.

The Federal Reserve maintained interest rates within the 3.75%-4.00% range on Wednesday, as anticipated, and refrained from making any shifts in borrowing costs until after the midterm elections. This decision has prompted traders to now estimate a 78% probability of a rate increase in December, a decrease from the 84% probability prior to the announcement, according to the CME's FedWatch Tool. Higher interest rates make holding non-yielding assets like gold less attractive, thereby diminishing its appeal to investors.

The upcoming Personal Consumption Expenditures data, released at 1230 GMT, will serve as a crucial indicator for the Fed, as it strives to achieve a 2% inflation rate. On a broader scale, the World Bank predicts a 23% surge in global commodity prices in 2026, driven by surging energy costs, disruptions in cargo shipping due to the West Asia conflict, grain shipment issues in the Black Sea, and heightened demand for safe-haven assets, including gold.

In other news, China's net gold imports through Hong Kong in September surged more than 28% from the previous month, reaching a five-month high, according to data from the Hong Kong Census and Statistics Department. Geopolitically, US Vice President JD Vance penned a letter to Iranian Security Council chief Mohsen Rezaei in an attempt to restart peace talks, as reported by the Wall Street Journal.

Additionally, silver experienced a 1.5% drop to $53.15 per ounce, platinum fell 1.5% to $1,515.70, and palladium declined 0.6% to $1,004.25.