The Federal Reserve deferred rate adjustments until after the upcoming U.S. midterm elections while monitoring inflation figures ahead of Personal Consumption Expenditures data. Market expectations for a December Fed rate hike subsequently dropped to about 78%, which continues to influence non-yielding precious metals. Physical consumption offered some support, evidenced by China's net gold imports through Hong Kong surging over 28% month-on-month in September. Across broader markets, the European Central Bank is expected to keep rates steady amid French bond-market volatility.
Key points
The Federal Reserve kept interest rates unchanged while awaiting Personal Consumption Exp…: The Federal Reserve kept interest rates unchanged while awaiting Personal Consumption Expenditures inflation data after the midterm elections.
Odds of a Federal Reserve interest rate increase in December decreased from 84% down to r…: Odds of a Federal Reserve interest rate increase in December decreased from 84% down to roughly 78%.
The World Bank projected that global commodity prices will increase by 23% in 2026 due to…: The World Bank projected that global commodity prices will increase by 23% in 2026 due to safe-haven demand and shipping disruptions.
Sources checked by our analysis pipeline: 1
Fundamentals
Spot gold fell 0.7% to $4,039.26 per ounce by 0044 GMT, while US gold futures for December delivery steadied at $4,051.00.The dollar held firm, making greenback-priced bullion more expensive for holders of other currencies.
The Fed held rates steady on Wednesday as expected, opting to delay any changes to borrowing costs until after next week's US midterm elections while it awaits further data on inflation, which the central bank said "remains elevated."
Traders are pricing in about a 78% chance of a rate hike in December, compared with 84% before the announcement, according to the CME's FedWatch Tool.
Higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors.
Markets are awaiting the Personal Consumption Expenditures (PCE) data due at 1230 GMT, a key gauge closely watched by the Fed as it targets a 2% inflation rate.
The European Central Bank is set to keep rates on hold on Thursday in a well-telegraphed decision that is likely to be overshadowed by questions about bond-market turmoil in France.
Investor enthusiasm for artificial intelligence faced a sharp reality check after massive spending undermined megacap tech valuations, triggering broad sell-offs across regional bourses. Compounding the pressure, market participants are navigating diverging global interest rate trajectories alongside renewed diplomatic efforts in the Middle East. These combined crosscurrents are prompting traders to reassess risk exposures ahead of crucial United States inflation data.
The city's de facto central bank mirrored American borrowing costs to maintain its currency peg within the established 7.75 to 7.85 band. Local policymakers warned that upcoming shifts in borrowing costs remain unpredictable due to broader American economic data. These impending adjustments could soon sway financial conditions and interbank liquidity across the territory.
Positive price momentum has captured market attention during the current trading session as shares demonstrate notable strength. Market participants are monitoring the advance closely to determine the fundamental reasons behind the shift. Clear catalysts for this specific upward movement have not yet been disclosed.