Gold Prices Set for Weekly Decline as Traders Assess Fed Signals
Gold prices remained largely steady on Friday but were heading for a weekly decline as traders assessed the possibility of further US Federal Reserve interest rate hikes. Spot gold fell 0.1% to $4,165.12 per ounce and was down 0.7% for the week, while US gold futures settled 0.3% higher at $4,181.10.
Stronger-than-expected US inflation data, including the sharpest rise in producer prices in four and a half years, increased expectations that the Federal Reserve could keep monetary policy tight. Fed Chair Kevin Warsh offered no clear indication of the future rate path, leaving investors uncertain. Markets largely expected rates to remain unchanged in October, while pricing in a higher possibility of a rate hike in December.
Higher interest rates typically reduce gold’s appeal because the metal does not generate interest income. Analysts expect prices to face further pressure if the Fed continues raising rates. Meanwhile, gold traded at a premium in India for the first time in more than three months as lower prices boosted jewellery demand. Silver, platinum and palladium were also heading for weekly losses.
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