Gold drops 1% as markets assess Fed signals, await US inflation data
GLD•GLD•GLD•GLD•Spot gold fell 1.1% to $4,024.22 an ounce on Thursday, while December US gold futures dropped 0.4% to $4,035.90. Traders priced in an 83% chance of a December Fed rate hike ahead of US PCE inflation data.
Spot gold fell 1.1% to $4,024.22 per ounce by 0618 GMT, and December US gold futures dropped 0.4% to $4,035.90. Bullion was on track for its second consecutive monthly decline. An OANDA analyst said the Fed’s decision and Chair Kevin Warsh’s remarks prompted fresh bearish positioning in early Asian trade.
The Fed held interest rates at 3.75%-4.00% on Wednesday, as expected. Traders priced in about an 83% chance of a December rate hike. Markets awaited US Personal Consumption Expenditures data, due at 1230 GMT; higher rates increase the opportunity cost of holding non-yielding bullion.
An OANDA analyst said gold would remain under pressure without a clear resolution to the conflict in the Middle East. Separately, China’s net gold imports via Hong Kong rose more than 28% in September from August, reaching a five-month high.
