Follow-Up: Gold Reclaims $4,000 on Monday as Oil Retreats and Traders Await the Fed Decision
Spot gold rose 0.4% to $4,010.51 an ounce by 0544 GMT on Monday, reclaiming the $4,000 mark after hitting its lowest level since mid-July in the previous session, Reuters reported. U.S. gold futures for December delivery gained 0.4% to $4,024.00. Bullion had posted a 4% weekly fall on Friday, its steepest weekly decline since June.
"The jump that we've seen is mostly symptomatic of the kind of relief provided by a lower oil price, but one that could easily be capped as markets position for the FOMC decision in a couple of days' time," said Kyle Rodda, senior financial market analyst at Capital.com. "Gold will continue to trade as a function of interest rate expectations and geopolitical risks." Oil prices fell on Monday after surging to near six-month highs last week, amid hopes of easing hostilities between the United States and Iran, although ongoing attacks on Saudi Arabia by Yemen's Houthis kept supply concerns in focus. Qatari mediators were in Tehran on Sunday to help de-escalate regional tensions in coordination with the United States, an official briefed on the situation told Reuters.
Markets await the Federal Reserve's policy meeting on October 27-28. Traders largely expect the central bank to leave rates unchanged this week, while expectations for a hike in December stand at 77%, according to CME's FedWatch tool. The U.S. Personal Consumption Expenditures data, a key gauge for the central bank as it targets 2% inflation, is due the day after the decision. Although gold is typically seen as an inflation hedge, higher interest rates tend to diminish the appeal of non-yielding bullion.
Source: GSM · USA (original Chinese edition)
Photo: 瑞士铸造的12.5公斤金条，Ank Kumar摄，CC BY-SA 4.0（Wikimedia Commons）；A 12.5 kg gold bar minted in Switzerland, photo by Ank Kumar, CC BY-SA 4.0 (Wikimedia Commons)
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