World gold prices fell after the US Federal Reserve left interest rates unchanged and did not provide clear signals about future monetary policy. As of the morning of October 29, the spot price of gold had fallen by 0.3% to $4,053.90 per ounce. Bloomberg reports, writes UNN.
Details
During trading, the precious metal fell by as much as 0.4%, approaching the $4,050-per-ounce mark. The decline followed three days of moderate gains.
The Federal Open Market Committee voted 10–2 to keep the benchmark interest rate unchanged. At the same time, Fed Chair Kevin Warsh said that the number of rate decisions could potentially be reduced from eight to six per year.
Why gold is becoming cheaper and what investors expect
Markets are pricing in the possibility of an interest-rate hike as early as December due to persistent inflation and high energy prices. Tighter monetary policy is usually negative for gold, since the asset does not generate interest income.
Instability in the stock market remains an additional pressure factor. Last week, a decline in technology stocks prompted some investors to sell gold to cover losses.
Overall, the precious metal lost about 2.5% of its value in October and may end its second consecutive month lower.
At the same time, silver fell by 0.2% to $53.86 per ounce. Platinum prices were little changed, while palladium rose.
Further market dynamics may be determined by new US inflation data, which will affect expectations regarding the Fed’s December decision.
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