Gold declines as markets assess US interest rate indicators
Decline in gold, silver, platinum, and palladium due to expectations of interest rate hikes by the Federal Reserve
Translated by Qiyas from الجريدة — Original source
Gold prices fell today as persistent inflationary pressures bolstered expectations that the Federal Reserve (the US central bank) will raise interest rates again later this year, amid anticipation of US inflation data.
Spot gold dropped 0.8 percent to $4,035.28 per ounce, while US December gold futures fell 0.1 percent to $4,047.10. Gold is on track to record a monthly decline for the second consecutive month.
Han Tan, chief market analyst at BNP Paribas, said, “Gold could fall further below $4,000 if personal consumption expenditure figures exceed market expectations, further paving the way for an interest rate hike in December.”
According to CME’s FedWatch tool, traders see a 90 percent probability of an interest rate increase in December. Higher interest rates increase the opportunity cost of holding gold, which yields no return, thereby reducing its appeal to investors.
Among other precious metals, spot silver fell 1.9 percent to $52.9341 per ounce, platinum dropped 2.9 percent to $1,493.71, and palladium declined 1 percent to $1,000.91. These three metals are also heading for a second consecutive monthly decline.
