Gold slips as markets assess Fed signals, await US inflation data
Gold prices fell on Thursday as investors assessed signals from the 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 0.7% to $4,037.98 per ounce by 0410 GMT, while US gold futures for December delivery steadied at $4,049.80. “Today’s fall is purely…
Gold prices declined on Thursday as investors analyzed signals from the Federal Reserve and Chair Kevin Warsh, following the decision to keep interest rates unchanged. Spot gold slipped 0.7% to $4,037.98 per ounce by 0410 GMT, while US gold futures for December delivery remained steady at $4,049.80. Analyst Ajay Kedia explained that today's decline stemmed from ongoing Middle East uncertainty and market positioning ahead of key US inflation data later in the day.
The Federal Reserve maintained interest rates at 3.75%-4.00% on Wednesday, as expected, citing their decision to delay any adjustments to borrowing costs until after the upcoming US midterm elections, while they await additional data on inflation. Traders now estimate a 78% probability of a rate hike in December, down from 84% prior to the announcement, according to the CME's FedWatch Tool.
Higher interest rates elevate the opportunity cost of holding non-yielding bullion, diminishing its attractiveness to investors. Market participants eagerly anticipate the Personal Consumption Expenditures data at 1230 GMT, a critical indicator closely monitored by the Fed in its pursuit of a 2% inflation target. Global commodity prices are projected to increase by 23% in 2026, as per the World Bank, driven by rising energy costs, disruptions to cargo shipping due to the Middle East conflict, grain shipment challenges in the Black Sea, and heightened demand for secure assets like gold.
In related news, China's net gold imports via Hong Kong in September surged more than 28% from the previous month, reaching a five-month high, according to data released by the Hong Kong Census and Statistics Department. On the geopolitical front, US Vice President JD Vance reached out to Iranian Security Council chief Mohsen Rezaei via letter, seeking to rekindle peace negotiations, as reported by the Wall Street Journal.
Silver prices slipped 1.5% to $53.15 per ounce, platinum declined 1.5% to $1,515.70, and palladium fell 0.6% to $1,004.25.
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