Gold at two-week low amid inflation fears
Gold declined amid inflation fears and rising oil prices, with expectations of an interest rate hike in December.
Translated by Qiyas from الجريدة — Original source
Gold fell today to its lowest level in two weeks, as rising oil prices exacerbated inflation concerns ahead of the Federal Reserve’s monetary policy meeting next week.
Sonie Kumari, an analyst at ANZ, said: “Gold prices could fall further, as we are still seeing significant uncertainty in the energy market.”
Last week’s U.S. consumer price index and producer price index data came in higher than expected, largely due to persistent energy cost increases. This reinforces arguments for tighter monetary policy, although Fed officials are still not expected to take such action when they meet on October 27-28.
Goldman Sachs expects the U.S. interest rate to be raised by 25 basis points in December, bringing the rate range to between 4% and 4.25%.
Personal consumption expenditures data, scheduled for release on October 29, could provide further clues for interest rate expectations. This data represents a key indicator closely monitored by the central bank.
Hamad Hussein, chief climate and commodities economist at Capital Economics, said: “Since personal consumption expenditures data will show that prices rose at a rate concerning to the Federal Reserve, the Federal Open Market Committee’s statement may adopt a more hawkish tone, which could negatively impact gold prices.”
