Gold drops over 1% as oil rally reinforces higher-for-longer rate outlook
GLD•Spot gold fell 1.1% to $4,094.90 an ounce, its lowest since October 14, as rising oil prices stoked inflation concerns and reinforced expectations that rates could stay higher for longer. Traders priced in a 90% chance of a U.S. rate hike in December.
1. Gold prices fall
Spot gold fell 1.1% to $4,094.90 per ounce by 0333 GMT, its lowest since October 14. U.S. gold futures for December delivery dropped 0.9% to $4,111.40.
2. Oil and rate outlook
Rising oil prices stoked inflation concerns and strengthened expectations that interest rates could remain higher for longer, weighing on gold. Traders saw a 16% chance of a rate hike at the Fed’s October 27-28 meeting and a 90% likelihood of an increase in December.
3. Other metals decline
Investors awaited the Fed meeting and upcoming Personal Consumption Expenditures data. Spot silver fell 2.6% to $56.44 per ounce, platinum slid 2.1% to $1,594.25 and palladium dropped 2.6% to $1,059.05.
