Gold eases on firmer dollar ahead of Fed decision
GLD•Spot gold fell 0.3% to $4,004.55 an ounce as the dollar held near a two-week high and investors awaited the Federal Reserve’s decision. Traders priced in an 11% chance of a rate hike this week and an 80% chance of one in December.
1. Gold prices slip
Spot gold eased 0.3% to $4,004.55 per ounce by 0721 GMT, while U.S. gold futures for December delivery fell 0.5% to $4,017. The dollar held near a two-week high, reducing the appeal of dollar-priced bullion for overseas buyers.
2. Fed decision in focus
Investors were looking to the Federal Reserve’s policy meeting for guidance on interest rates, with its decision due Wednesday and U.S. Personal Consumption Expenditures data due Thursday. Traders priced in about an 11% chance of a rate hike this week and an 80% chance of a December increase. Higher interest rates can weigh on gold, which does not yield interest.
3. Recent market moves
Gold fell below $4,000 last week for the first time since mid-July and posted a 4% weekly decline, its steepest in about four months. Ilya Spivak of Tastylive said a break below $3,900 could lead to a further decline, potentially toward $3,800.
