Gold slipped in late Monday trading as a firmer U.S. dollar weighed on the metal, Reuters reported, while investors watched for the Federal Reserve’s Oct. 28 decision and U.S. inflation data due the following day.
At 8:45 p.m. ET Monday (0045 GMT Tuesday), spot gold was quoted at $4,013.70 per ounce, down 0.1%, Reuters reported. The agency put December U.S. gold futures at $4,027.10, down 0.3%. Reuters linked the declines to the stronger dollar, which can make dollar-priced gold less attractive to buyers using other currencies. The move follows EconoTimes’ earlier report on gold below $4,135 ahead of the Fed meeting.
Gold does not pay interest income, so higher rates can make assets that do pay interest more appealing by comparison, Reuters noted. The Federal Open Market Committee (FOMC) raised its federal funds target range by 0.25 percentage point at its Sept. 15-16 meeting, setting it at 3.75% to 4%. The committee said inflation remained elevated relative to its 2% goal.
Reuters reported that CME FedWatch implied an 11% chance of a rate increase at this week’s meeting and an 82% chance of an increase in December, based on a 0045 GMT snapshot. CME’s tool calculates those odds from 30-day federal funds futures, so they may change when traders reprice the contracts.
The Fed’s two-day policy meeting runs through Wednesday, Oct. 28. The policy statement is scheduled for 2 p.m. ET, followed by a press conference at 2:30 p.m. ET. The Bureau of Economic Analysis (BEA) is due to release its September personal income and outlays report at 8:30 a.m. EDT Thursday, Oct. 29; the release includes the Personal Consumption Expenditures (PCE) price index.
