Gold gains on softer oil prices; Fed decision in focus
GLD•Spot gold rose 0.3% to $4,008.70 an ounce as softer oil prices eased inflation concerns, with investors awaiting the Fed’s October 27-28 meeting. Traders priced in a 79% chance of a December rate hike.
1. Gold edges higher
Spot gold rose 0.3% to $4,008.70 per ounce by 0755 GMT on Monday after reaching its lowest level since mid-July in the previous session. Gold futures for December delivery gained 0.3% to $4,021.90. Bullion fell 4% last week, its steepest weekly decline since June.
2. Markets await Fed decision
Oil prices fell after nearing six-month highs last week, tempering inflation concerns. Investors are watching the Fed’s October 27-28 policy meeting; traders largely expect rates to remain unchanged this week, while pricing in a 79% chance of a hike in December. US Personal Consumption Expenditures data is due Thursday.
3. Rates and bullion demand
Capital.com analyst Kyle Rodda said lower oil prices provided relief for gold, but gains could be capped as markets position for the Fed decision. He said gold would continue to trade in response to interest-rate expectations and geopolitical risks. Higher interest rates tend to reduce the appeal of non-yielding bullion.
