Gold drops over 1% as oil rally reinforces higher-for-longer rate outlook
GLD•Spot gold fell 1.3% to $4,085.29 an ounce, its lowest since October 14, as rising oil prices reinforced expectations that interest rates could stay higher for longer. Traders saw a 91% chance of a U.S. rate hike in December.
1. Gold hits two-week low
Spot gold fell 1.3% to $4,085.29 per ounce by 0530 GMT on Thursday, its lowest since October 14. U.S. gold futures for December delivery dropped 1.2% to $4,100.90.
2. Rates weigh on gold
Rising oil prices stoked inflation concerns and reinforced expectations that rates could stay higher for longer, weighing on gold, an asset that does not yield interest. Traders saw a 15% chance of a rate hike at the Federal Reserve's October 27-28 meeting and a 91% likelihood of an increase in December.
3. Investors await data
Investors were awaiting next week's Federal Reserve meeting and Personal Consumption Expenditures data, a key inflation gauge watched by the central bank as it targets 2% inflation. Spot silver fell 3.3% to $56.05 per ounce, platinum slid 2.2% to $1,593.05 and palladium dropped 2.7% to $1,057.32.
