Gold steadies after weekly drop as focus shifts to Fed meeting

[SINGAPORE] Gold steadied after its biggest weekly drop since June, with traders weighing stubbornly high energy prices ahead of the US Federal Reserve’s upcoming policy meeting.

Bullion traded either side of US$4,000 an ounce, after falling more than 4 per cent last week to the lowest since July.

Oil edged back from a six-month high, after US President Donald Trump told Fox News that he was nearing a decision on whether to make a deal with Iran or resume attacks. US consumer sentiment slipped to a five-month low in October.

Expectations around the Fed’s interest rate path have shifted over the past month, adding to uncertainty around the near-term prospects for gold.

Traders initially raised bets on an October hike after hotter-than-expected inflation prints, before comments by central bank officials reined in such forecasts.

The market is now pricing in a roughly 10 per cent chance that the Fed will increase rates when it meets later this week, although inflationary pressure from elevated energy prices has prompted bets on a hike before end-2026.

Higher borrowing costs are a headwind for gold, which does not pay interest.

Gold has fallen by about a quarter since the US-Iran war began in late February, driven down by tighter monetary policy as major economies attempt to rein in inflation.

Last week’s dip below US$4,000 an ounce was also spurred by a rotation out of artificial intelligence-related stocks into bonds, with gold sold off as investors tried to cover losses in equities.

SEE ALSO

Gold looks to greenback for next direction

Gold liquidity deep enough for Asian, Western hubs to coexist, Hong Kong and Singapore say

Strategic case for precious metals

Spot gold slipped 0.1 per cent to US$3,993.20 an ounce at 8.18 am in Singapore. Silver climbed 0.5 per cent to US$54.12 an ounce, having given up 5.4 per cent last week.

Platinum and palladium edged higher. The Bloomberg Dollar Spot Index, a gauge of the US currency, fell 0.1 per cent. BLOOMBERG