Gold drops over 1% as oil rally reinforces higher-for-longer rate outlook
GLD•GLD•GLD•GLD•Spot gold fell 1.1% to $4,095.75 an ounce after hitting its lowest level since October 7, as rising oil prices reinforced expectations that interest rates could stay higher for longer. Traders saw a 15% chance of a rate hike at the Fed’s October meeting and an 87% chance in December.
Spot gold fell 1.1% to $4,095.75 per ounce by 0721 GMT, after touching its lowest level since October 7. U.S. gold futures for December delivery dropped 0.9% to $4,112.10. Rising oil prices stoked inflation concerns and reinforced expectations that interest rates could remain higher for longer, weighing on gold.
Traders priced in a 15% chance of a rate hike at the Federal Reserve’s October 27-28 meeting and an 87% likelihood of an increase in December. U.S. PCE data expected on October 29 could offer further clues about the monetary policy outlook. Silver fell 3.3% to $56.06 per ounce, platinum lost 2.1% to $1,594.96 and palladium dropped 2.4% to $1,061.
