Gold set for a weekly drop as traders assess Fed signals
GLD•Gold was up 0.1% at $4,175.66 an ounce on Friday but was down 0.4% for the week as traders assessed hotter-than-expected US inflation data and the prospect of further Federal Reserve rate hikes.
1. Inflation and rate outlook
Gold prices were largely steady on Friday as traders weighed the prospect of further Federal Reserve rate hikes this year after US producer prices rose by the most in 4-1/2 years last month and consumer prices accelerated in September. Federal Reserve Chair Kevin Warsh gave no clues about the central bank’s rate path.
2. Metals and market expectations
Traders largely expect the Fed to hold rates steady this month, while pricing in a 90% chance of a rate hike in December, according to the CME’s FedWatch Tool. Silver, platinum and palladium were also headed for weekly losses. Gold traded at a premium in India for the first time in more than three months as a price pullback boosted jewellery purchases.
