Gold adrift as investors await more data for US Fed rate clues

GOLD prices drifted lower on Tuesday (Sep 26) as the US dollar and Treasury yields climbed, with investors awaiting a key consumer inflation report for more cues on whether the Federal Reserve will hike interest rates once again this year.

Spot gold ticked down 0.1 per cent to US$1,914.61 per ounce by 0056 GMT, while US gold futures fell 0.2 per cent to US$1,933.30.

The US dollar hit a 10-month high, while benchmark 10-year Treasury yields continued their ascent to a fresh 16-year peak.

Wall Street eked out a gain in Monday’s choppy market as investors continued to digest last week’s central bank indications that interest rates would stay higher for longer.

Forecasts published on Wednesday showed that a majority of Fed policymakers see one more rate hike in the next three months, but investors continue to price in only about a 50 per cent chance of further tightening in 2023.

Higher interest rates weigh on non-interest-paying bullion, which is priced in US dollars.

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The European Central Bank’s (ECB) record high deposit rate could help cut inflation to 2 per cent, ECB president Christine Lagarde said on Monday, repeating the bank’s guidance that neither promises nor rules out further rate hikes.

German business morale deteriorated slightly in September, falling for the fifth month in a row and underlining recession fears in the eurozone’s largest economy, a survey showed.

A US government shutdown would harm the country’s credit, rating agency Moody’s said.

SEE ALSO

Gold flat as markets assess US Fed’s interest rate outlook

The personal consumption expenditures price index, the Fed’s preferred inflation gauge, will be out on Sep 29.

SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.1 per cent on Monday to their lowest level since January 2020.

Spot silver fell 0.1 per cent to US$23.09 per ounce, platinum shed 0.3 per cent to US$908.69 and palladium slipped 0.1 per cent to US$1,228.31. REUTERS