Gold fell below $4,135 an ounce Tuesday while Brent crude stayed above $109 a barrel, putting energy-driven inflation in focus before the Federal Reserve’s Oct. 27-28 policy meeting.
Spot gold stood at $4,131.62 an ounce at 2:42 a.m. ET, down 0.2%, Investing.com reported. Bloomberg’s earlier reading put it at $4,134.91 at 7:47 p.m. ET Monday, down 0.1%. The two prices were recorded at different times.
Investing.com placed Brent above $109 a barrel Tuesday. The benchmark had reached $110.70 Monday, its highest level in five months. Elevated oil prices add to investors’ attention on inflation after a sharp increase in U.S. gasoline prices.
The U.S. Bureau of Labor Statistics (BLS) said consumer prices rose 0.6% in September on a seasonally adjusted basis. The unadjusted index was 3.7% higher than a year earlier. Gasoline accounted for more than half of the monthly increase: Its index rose 9.1% after seasonal adjustment.
The Fed raised its target interest rate range by 0.25 percentage point to 3.75% to 4% on Sept. 16. In Investing.com’s Oct. 20 report, CME FedWatch pricing indicated an 83% probability that the range would stay unchanged at the October meeting. That estimate reflects market pricing, not a Fed decision. Fed Chair Kevin Warsh gave no advance signal about the decision during an Oct. 16 appearance, the Associated Press reported.
Higher yields can make gold less attractive relative to assets that pay interest because bullion provides no such income. The World Gold Council identified rising yields and a stronger dollar as contributors to an 8.5% decline in its U.S. dollar gold price measure in September.
The Fed is scheduled to announce its next rate decision at 2 p.m. ET Oct. 28. The next U.S. consumer price report is due Nov. 10 at 8:30 a.m. ET.
