Gold dipped after the Federal Reserve kept interest rates unchanged and offered little guidance on its next move, leaving traders guessing over the prospect of a hike before year-end. Bullion fell as much as 0.4% to near $4,050 an ounce, after three days of modest gains. The Federal Open Market Committee voted 10-2 in favor of holding its benchmark federal funds rate, while Fed Chair Kevin Warsh said the central bank would likely reduce the number of interest-rate decisions to six from eight per year — a move that analysts said could foster more uncertainty.
For gold traders, the Fed’s decision Wednesday was largely expected. The wider market has priced in a rate hike in December, as stubbornly high energy prices complicate efforts to rein in inflation. Tighter monetary policy is a headwind for gold, which doesn’t pay interest. The US Personal Consumption Expenditures price index — the Fed’s preferred inflation gauge — should provide further clues on the central bank’s rate policy for December. The September print is due later on Thursday.
Meanwhile, gold remains vulnerable to broader equity liquidations as traders assess whether artificial intelligence spending is weighing on cash flow. An AI-led stocks rout last week helped drag bullion to the lowest since July, as investors sold gold to cover losses in equities. The precious metal has declined 2.5% in October, on course for a second monthly loss. Spot gold fell 0.3% to $4,053.90 an ounce at 7:36 a.m. in Singapore. Silver slipped 0.2% to $53.86 an ounce. Platinum was little changed, while palladium gained. The Bloomberg Dollar Spot Index, a gauge of the US currency, dropped 0.1%.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing