Gold Little Changed as Investors Weigh Fed Outlook
Gold prices hovered around $4,150 an ounce on Monday as investors assessed easing oil prices and awaited next week’s Federal Reserve meeting. Oil retreated from a five-month high after US President Donald Trump eased sanctions and tariffs on Russia, raising hopes of increased fuel supplies and easing inflation pressures. Recent US CPI and PPI data showed stronger-than-expected inflation, partly driven by higher gasoline costs. Investors are now awaiting the Fed’s policy decision and US PCE inflation data, the central bank’s preferred inflation gauge. According to CME’s FedWatch Tool, markets see a 15% chance of a rate hike this month, while the probability of a December increase stands at 89%. Elsewhere, the European Central Bank is likely to deliver at least one more 25-basis-point rate hike this year to combat persistent inflationary pressures. While gold is considered an inflation hedge, higher interest rates tend to pressure the non-yielding metal.
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Gold prices hovered around $4,150 an ounce on Monday as investors assessed easing oil prices and awaited next week’s Federal Reserve meeting. Oil retreated from a five-month high after US President Donald Trump eased sanctions and tariffs on Russia, raising hopes of increased fuel supplies and easing inflation pressures. Recent US CPI and PPI data showed stronger-than-expected inflation, partly driven by higher gasoline costs. Investors are now awaiting the Fed’s policy decision and US PCE inflation data, the central bank’s preferred inflation gauge.
According to CME’s FedWatch Tool, markets see a 15% chance of a rate hike this month, while the probability of a December increase stands at 89%. Elsewhere, the European Central Bank is likely to deliver at least one more 25-basis-point rate hike this year to combat persistent inflationary pressures. While gold is considered an inflation hedge, higher interest rates tend to pressure the non-yielding metal.