Gold ends September with a 6% loss

Gold prices fell yesterday, heading toward a monthly loss exceeding 6%, as investors increasingly awaited U.S. inflation data that could bolster interest rate expectations and shape the Federal Reserve’s monetary policy path in the coming months. Spot gold declined 0.2% to $4,170.63 per ounce during yesterday’s trading, moving toward its largest monthly drop in some time, while U.S. gold futures rose 0.5% to $4,201.90. The dollar, in turn, is on track to post monthly gains, increasing the cost of dollar-denominated gold for holders of other currencies. Markets were awaiting yesterday’s release of the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred gauge of inflation, in search of clues about the interest rate trajectory. Tony Sage, CEO of Critical Metals, said the PCE data would be an “important test for gold,” given its potential impact on monetary policy expectations, Treasury yields, and the dollar. He added that a weaker inflation reading could support gold and pave the way for a return to the $4,200–$4,300 range, whereas a stronger reading could push bond yields and the dollar higher, putting renewed pressure on the metal as it tests the $4,100 level. Higher interest rates typically reduce the appeal of gold, which yields no return; the U.S. central bank raised rates by 25 basis points last September. In the same vein, John Williams, president of the Federal Reserve Bank of New York, said policymakers may need only one additional interest rate hike this year to bring inflation back onto a path consistent with the Fed’s 2% target. On the geopolitical front, Qatar said it hopes mediation efforts between Tehran and Washington will lead to a breakthrough, despite U.S. President Donald Trump denying reports that Washington is prepared to ease sanctions on Iran and release frozen Iranian funds in exchange for concessions on its nuclear program. Spot silver fell 0.8% to $60.98 per ounce, platinum held steady at $1,705.10, and palladium dropped 0.3% to $1,219.60, with all three metals also heading toward monthly losses.