News Maker 23

Gold prices weakened after the Federal Reserve maintained interest rates and offered few clues regarding its next policy move. In trading on Thursday (October 29), XAU/USD hovered around US$4,045 per troy ounce, as the market continued to assess the likelihood of an interest rate hike before the end of the year.

The Fed’s decision was largely anticipated by the market. The FOMC voted 10-2 to keep interest rates unchanged, while Fed Chair Kevin Warsh indicated that the central bank would reduce the number of meetings in which interest rate decisions are made—a change seen as potentially increasing uncertainty for market participants.

For gold investors, the possibility of a rate hike in December remains a primary concern. Persistently high energy prices have made efforts to curb inflation more challenging. Tighter monetary policy generally exerts pressure on gold, as the asset does not yield any returns.

The market is now awaiting U.S. Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge. This data is expected to provide further insight into the likely policy direction for the December meeting.

Beyond interest rates, gold also remains vulnerable to sell-offs in the stock market. Concerns regarding the scale of investments in artificial intelligence—and their impact on corporate cash flows—could trigger the liquidation of assets, including gold, as investors seek liquidity to cover losses.

Gold has faced pressure throughout October, following a previous rally. This decline suggests that the precious metal’s bullish momentum is encountering headwinds from a combination of tight monetary policy, the strength of the dollar, and stock market volatility.

Meanwhile, the Bloomberg Dollar Index fell by 0.1%, providing some breathing room for gold to withstand the pressure. Future price movements will depend heavily on U.S. inflation data and how the market interprets the Fed’s signals regarding the potential for further interest rate hikes. (srh)

Source: Newsmaker.id