Gold slips as markets assess Fed signals, await US inflation data
- Spot gold slid 0.7% to $4,037.98 per ounce
Gold prices fell as investors assessed the Federal Reserve's unchanged interest rates and awaited key US inflation data, with Middle East uncertainty also influencing market sentiment.
- Impact of the Federal Reserve's interest rate decisions on gold.
- Anticipation of crucial US inflation data and its market implications.
- World Bank's forecast for a 23% surge in global commodity prices by 2026.
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 because of persistent Middle East uncertainty and markets positioning ahead of today’s inflation data,“said Ajay Kedia, director at Mumbai-based Kedia Commodities.
The Fed held rates steady on Wednesday, in the 3.75%-4.00% 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 a 78% chance of a rate hike in December, compared with 84% before the announcement, according to the CME’s FedWatch Tool.
Higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors. Markets are awaiting the Personal Consumption Expenditures data due at 1230 GMT, a key gauge closely watched by the Fed as it targets a 2% inflation rate.
Oil prices fall as peace hopes offset fears of growing Middle East conflict
Global commodity prices are set to surge 23% in 2026, the World Bank said on Wednesday, citing rising energy prices and disruptions to cargo shipping during the Middle East war, grain shipment problems in the Black Sea and high demand for safe-haven assets such as gold.
Elsewhere, China’s net gold imports via Hong Kong in September rose more than 28% from August to a five-month high, Hong Kong Census and Statistics Department data showed on Wednesday.
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.
Among other metals, spot silver fell 1.5% to $53.15 per ounce, platinum dropped 1.5% to $1,515.70 and palladium slid 0.6% to $1,004.25.