Gold Stabilizes Near Three-Month Low
Gold prices stabilized around $4,030 an ounce on Friday, hovering near three-month lows and leaving the precious metal down around 3% for the week, as rising oil prices have fueled expectations that US interest rates will remain higher for longer. Brent crude climbed to a more than five-month high after Houthi attacks in Saudi Arabia heightened concerns over further disruptions to energy supplies. Meanwhile, US consumer and producer inflation data released last week came in hotter than expected, largely reflecting rising energy costs and reinforcing the case for tighter monetary policy. However, Fed officials are still widely expected to leave rates unchanged at their October 27—28 meeting. Markets currently assign just a 9% probability to a rate hike next week, compared with more than 80% for December, according to CME’s FedWatch Tool. Investors also await US PCE inflation data on October 29 for further clues on progress towards the Fed’s 2% target.
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Gold prices stabilized around $4,030 an ounce on Friday, hovering near three-month lows and leaving the precious metal down around 3% for the week, as rising oil prices have fueled expectations that US interest rates will remain higher for longer. Brent crude climbed to a more than five-month high after Houthi attacks in Saudi Arabia heightened concerns over further disruptions to energy supplies. Meanwhile, US consumer and producer inflation data released last week came in hotter than expected, largely reflecting rising energy costs and reinforcing the case for tighter monetary policy.
However, Fed officials are still widely expected to leave rates unchanged at their October 27—28 meeting. Markets currently assign just a 9% probability to a rate hike next week, compared with more than 80% for December, according to CME’s FedWatch Tool. Investors also await US PCE inflation data on October 29 for further clues on progress towards the Fed’s 2% target.