News Maker 23

Global gold prices remained under pressure during Thursday’s (Oct 15) trading session, hovering around US$4,138 per troy ounce following a 1.3% drop in the previous session. The decline came after US inflation data showed a sharp increase, fueling concerns that the Federal Reserve (The Fed) may need to raise interest rates further to bring prices under control.

Data from the US Bureau of Labor Statistics showed that the Consumer Price Index (CPI) rose by 0.6% month-on-month in September—the fastest pace since April—driven largely by high energy costs. Inflationary pressures, exacerbated by energy supply disruptions linked to the US-Iran conflict, have weighed on gold, which has lost more than 20% of its value amid a high-interest-rate environment.

Following the inflation release, market participants increased the probability of a Fed interest rate hike at the October meeting to approximately 30%. Yields on US government bonds remained near multi-year highs, while the US dollar strengthened to its highest level in over a year. These conditions have diminished the appeal of gold, as the metal does not generate interest income.

Chicago Federal Reserve President Austan Goolsbee described the latest inflation data as disappointing, warning that the development of artificial intelligence (AI) infrastructure could also exert additional economic pressure. He noted that it is still too early to determine whether current interest rates are sufficiently high to bring inflation back toward the Fed’s 2% target.

Investors are now awaiting remarks from Fed Chair Kevin Warsh at an International Monetary Fund (IMF) meeting in Bangkok, ahead of the "blackout period" (a restriction on public communication) leading up to the policy meeting on October 27–28. As of 07:32 Singapore time, spot gold remained relatively stable at US$4,102.60 per troy ounce, while silver stood at US$55.53, following a 6% plunge in the previous session. The future direction of gold is expected to remain influenced by expectations regarding Federal Reserve interest rates, movements in the US dollar, and bond yields.