Solid Gold Futures – Global gold prices weakened again in Thursday’s trading session after the Federal Reserve opted to keep interest rates unchanged, while offering limited guidance on its future policy moves. On Thursday (October 29), XAU/USD traded around US$4,029 per troy ounce, following a modest three-session winning streak.
The Federal Open Market Committee (FOMC) voted 10-2 to maintain interest rates, a decision in line with market expectations. However, the Fed signaled a potential shift in its policy schedule, with the number of rate-setting meetings possibly being reduced from eight to six per year.
The market continues to anticipate a potential interest rate hike in December, as high energy prices sustain inflationary pressure. Such conditions act as a headwind for gold—a non-yielding asset—particularly if bond yields and the US dollar strengthen.
Investor attention is now focused on the US Personal Consumption Expenditures (PCE) price index for September, scheduled for release on Thursday. As a key inflation indicator closely monitored by the Fed, this data will provide crucial insight into the likelihood of further monetary tightening before the end of the year.
Despite short-term pressure, demand from central banks continues to provide support for gold. Goldman Sachs estimates that central banks purchased approximately 79 tonnes of gold in August—nearly five times the monthly average seen prior to 2022—with China accounting for about 25 tonnes. This demand could help establish a floor for gold prices, even as the asset remains weighed down by interest rate pressures and stock market volatility. (srh)