Gold posts weekly loss as markets await Fed decision
Gold records a weekly loss amid anticipation of the interest rate decision and rising expectations for monetary tightening.
Translated by Qiyas from الجريدة — Original source
Gold prices ended last week’s trading with relative stability, closing Friday’s session at around $4,348 per ounce, marking a weekly loss, as markets awaited the US Federal Reserve’s decision on interest rates.
A report issued on Sunday by Kuwait’s Dar Al Sibaak company stated that gold experienced notable fluctuations last week, after coming under pressure following the release of US inflation data, before recovering part of its losses amid falling bond yields and a fading of the initial dollar reaction.
The report added that movements in yields and the dollar remain among the key factors determining the precious metal’s direction, especially with the upcoming Federal Reserve meeting.
It clarified that US Consumer Price Index data showed inflation rose by 0.4 percent month-on-month in August and by 3.4 percent year-on-year, with both readings in line with market expectations.
It noted that core inflation rose by 0.3 percent month-on-month, exceeding the expected 0.2 percent, while the annual rate declined to 2.4 percent, in line with estimates.
It pointed out that the inflation data reinforced market expectations of continued tight monetary policy, raising the probability of a Federal Reserve rate hike at its next meeting to around 85 percent, up from about 72 percent prior to the data release.
The report indicated that rising rate-hike expectations did not prevent gold from regaining some gains as bond yields fell during Friday’s trading. It added that the dollar index stabilized near the 99-point level, while the yield on the 10-year US Treasury bond dropped by about one basis point to around 4.85 percent, providing some support for gold, as lower yields reduce the opportunity cost of holding the non-yielding metal.
