Gold set for a weekly drop as traders assess Fed signals
GLD•Gold was down 0.4% for the week as traders weighed hotter-than-expected US inflation data and the prospect of Federal Reserve rate hikes. Markets priced in a 90% chance of a December hike, while spot gold rose 0.1% to $4,175.34 per ounce on Friday.
1. Inflation and Fed signals
Gold prices were set for a weekly loss as traders assessed the prospect of further Federal Reserve rate hikes after hotter-than-expected US inflation data. Spot gold rose 0.1% to $4,175.34 per ounce by 9:44 a.m. EDT, but was down 0.4% for the week; December US gold futures gained 0.7% to $4,198.20.
2. Rate expectations
Federal Reserve Chair Kevin Warsh voiced optimism about the US economy but gave no clues about the rate path. Producer prices recorded their largest increase in 4-1/2 years last month, following September consumer-price data that showed prices accelerated. Traders largely expected rates to hold steady this month and priced in a 90% chance of a December hike. Silver, platinum and palladium also headed for weekly losses.
