Gold heads for sharpest weekly decline in four months on Fed rate outlook
GLD•Gold was down 3.4% for the week, its sharpest weekly decline since June, as higher oil prices and resilient US economic data lifted expectations that the Federal Reserve will keep rates higher for longer. Spot gold fell 0.1% to $4,018.69 per ounce.
1. Weekly decline deepens
Spot gold was down 0.1% at $4,018.69 per ounce by 0036 GMT after touching its lowest level since August 3. It had fallen 3.4% for the week, its biggest weekly decline since June, while December US gold futures dropped 0.6% to $4,033.70.
2. Rate outlook weighs
Oil prices rose about 4% on Thursday to a five-month high after Houthi attacks in Saudi Arabia raised concerns about energy supply disruptions. Higher energy prices and US jobless claims near 57-year lows bolstered expectations that the Fed could keep rates higher for longer, increasing the opportunity cost of holding non-yielding gold. Traders priced in a 7% chance of a rate hike next week, while expectations for a December hike remained at 81%.
3. Other metals fall
Investors were also focused on the Fed’s October 27-28 meeting and next week’s Personal Consumption Expenditures data. Silver, platinum and palladium were lower and headed for weekly declines.
