Gold was near $4,050 in early Asian trading Thursday, according to FXStreet, as investors assessed the Federal Reserve’s rate decision and awaited the next U.S. inflation reading.
The Federal Reserve’s policy-setting Federal Open Market Committee (FOMC) held the federal funds target range at 3.75%-4.00% Wednesday. The 10-2 vote included dissents from Lisa D. Cook and Beth M. Hammack, who backed a quarter-point increase. The Fed described economic growth as strong and said inflation remained elevated, while saying incoming information would guide policy. Its stated longer-run inflation goal is 2%.
Reuters reported spot gold at $4,039.39 an ounce, down 0.5%, at 3:12 p.m. ET (19:12 UTC) Wednesday. December U.S. gold futures settled at $4,051.60, a 0.6% decline; that futures contract is separate from the spot-market quote FXStreet reported early Thursday. Reuters said inflation worries tied to higher oil prices pressured bullion; an advance during Federal Reserve Chair Kevin Warsh’s remarks did not last through the session. Because gold pays no interest, higher rates can reduce its appeal compared with interest-bearing alternatives, Reuters reported.
The move follows EconoTimes’ earlier report on gold’s 0.3% predecision decline as traders awaited the Fed’s announcement. Reuters also reported that traders were watching the inflation release for more information on the policy outlook.
The U.S. Bureau of Economic Analysis (BEA) scheduled its September Personal Income and Outlays report, which includes the Personal Consumption Expenditures (PCE) price index, for 8:30 a.m. ET Thursday (12:30 UTC). Its latest available release, covering August, showed headline prices up 0.3% from July and 3.4% from a year earlier; excluding food and energy, the index rose 0.2% monthly and 3.0% annually. Both annual readings were above the Fed’s 2% inflation goal. The Fed’s next scheduled meeting is Dec. 8-9.
