Gold slipped Tuesday as investors assessed the prospect of another Federal Reserve rate increase and conflicting reports on U.S.-Iran talks, with higher borrowing costs posing a potential drag on bullion.
Bloomberg News reported spot gold at $4,123.97, down 0.4%, at 7:32 a.m. ET (11:32 UTC). The metal had moved between a 0.4% gain and a 0.7% loss during the session. Reuters recorded an earlier price of $4,120.87 per ounce, down 0.5%, at 7:03 a.m. ET (11:03 UTC).
Bloomberg News also reported that markets assigned a 15% chance to a quarter-point rate increase at the Fed’s Oct. 27-28 meeting. That figure reflects market pricing, not a Fed forecast. Separately, CME Group says its FedWatch tool calculates rate probabilities from 30-day federal funds futures prices.
The Federal Open Market Committee (FOMC) unanimously raised its target range by 0.25 percentage point to 3.75%-4% on Sept. 16. Meeting minutes show that most participants saw another increase as likely appropriate before year-end, while leaving future decisions dependent on new information. The median projection for the midpoint of the federal funds target range at year-end 2026 rose to 4.1% in September from 3.8% in June.
The U.S. Bureau of Labor Statistics (BLS) said consumer prices increased 0.6% from August to September and 3.7% from a year earlier. A 9.1% monthly rise in gasoline prices supplied more than half of the increase in the overall index. Higher interest rates can weigh on gold because it pays no interest, Bloomberg News reported.
Accounts of U.S.-Iran diplomacy differed. The New Arab reported Monday, citing unnamed sources familiar with the negotiations, that they expected a breakthrough this week. Bloomberg News reported Tuesday that an unnamed diplomat disputed the suggestion a deal was near but said talks continued. Reuters, citing Iranian media, reported that Iran’s security chief Mohsen Rezaei said Washington and Tehran would not hold talks until Tehran’s demands were met.
The FOMC meets Oct. 27-28. The next U.S. consumer price report is scheduled for Nov. 10.
