Health · Beacon Post
Gold slipped on Tuesday, weighed down by a firmer U.S. dollar, while investors looked ahead to the Federal Reserve's policy meeting for fresh guidance on the outlook for interest rates. Christopher Furlong | Getty Images Gold slipped on Tuesday, weighed down by a firmer U.S. dollar, while investors looked ahead to the Federal Reserve 's policy meeting for fresh guidance on the outlook for interest rates. Spot gold eased 0.2% to $4,007.29 per ounce by 0321 GMT, while US gold futures for December delivery dropped 0.5% to $4,019.70.
The US dollar held steady near a one-week high, reducing the appeal of greenback-priced bullion for overseas buyers. "We're seeing gold basically digest within Friday's range (after) the big drop last week," said Ilya Spivak, head of global macro at Tastylive. "If we can get a break through $3,900, we're in for a pretty significant further decline, maybe to test the $3,800 area." Bullion dropped below the $4,000 mark for the first time since mid-July last week, and posted a weekly fall of 4%, its worst in about four months, as higher energy prices fueled inflation concerns and reinforced US rate hike expectations.
Federal Reserve policymakers have telegraphed they will not raise US short-term borrowing costs again this week, but with inflation concerns still front and center, investors doubt a pause will last for long. Markets await the Fed's policy decision on Wednesday along with the Personal Consumption Expenditures data on Thursday, the central bank's preferred gauge as it targets a 2% inflation rate. Traders are pricing in about an 11% chance of a rate hike this week and an 82% chance of a December increase, according to the CME's FedWatch Tool.
While gold is often seen as a hedge against inflation, higher interest rates hurtits appeal as a non-yielding asset. On the geopolitical front, the Saudi-led coalition in Yemen said on Tuesday it intercepted and destroyed three ballistic missiles and drones launched by the Houthis towards two regions of Saudi Arabia. Among other metals, spot silver slid 0.7% to $53.53 per ounce, platinum lost 0.8% to $1,514.16 and palladium dropped 1.5% to $1,034.75.
Source: CNBC
