Gold steadies as traders weigh inflation and Fed path for rates
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Bullion was trading around US$4,375 an ounce, after posting a moderate gain the week before.
PHOTO: REUTERS
- Gold prices remain steady as traders consider persistent inflation and the US Federal Reserve's recent interest rate hike.
- Fed officials highlight ongoing inflation pressures beyond oil prices, influencing market expectations for future rate increases.
- Oil prices and geopolitical tensions in the Middle East add uncertainty, affecting gold's appeal as a non-yielding asset amid stable US dollar conditions.
AI generated
SINGAPORE – Gold was steady as traders weighed the risk of persistent inflation and the path for interest rates after the US Federal Reserve’s first hike since 2023.
Bullion was trading around US$4,375 (S$5,580) an ounce, after posting a moderate gain the week before.
Several Fed policymakers are due to speak publicly this week after voting unanimously to raise interest rates by a quarter percentage point at their Sept 15 to 16 meeting.
The move was a bid to help cool inflation that has not fallen below the Fed’s 2 per cent target in more than five years.
Minneapolis Fed President Neel Kashkari was first off the rank, saying on Sept 20 inflation remains too high and pressures have broadened beyond the oil-price shock of the Iran war.
“The inflation that the American people are feeling every day is much beyond just oil prices. It’s in all aspects of the economy,” he said in a television interview.
Chicago Fed President Austan Goolsbee is due to speak Sept 21 and New York Fed President John Williams on Sept 22.
Oil steadied as traders tracked supply risks in the Middle East at the start of a week that will be marked by intensified diplomacy over the US-Iran war.
President Donald Trump said in a Fox News interview that he may be open to a meeting with his Iranian counterpart, Masoud Pezeshkian, on the sidelines of the United Nations General Assembly in New York.
Qatar’s prime minister said that messages were being passed between the two sides.
Higher energy prices reinforce bets on interest rates staying elevated for longer, a negative for non-yielding bullion.
Markets were reassured by Fed Chair Kevin Warsh raising rates, despite repeated calls from Trump to lower them.
“We’ve largely moved past the Fed independence narrative following Warsh’s hike. Meanwhile, the forward guidance on rates came in broadly as expected”, leaving gold with “no real narrative and relatively few fresh catalysts in the near term”, said Justin Lin, an analyst at Global X ETFs.
“In this lull, gold will likely trade more closely off movements in oil prices and the broader inflation outlook.”
Spot gold was little changed at US$4,378.10 an ounce at 9.25am in Singapore. Silver rose 0.8 per cent to US$66.79 an ounce.
Platinum and palladium edged higher. The Bloomberg Dollar Spot Index, a gauge of the US currency, was stable after rising 1 per cent the previous week. BLOOMBERG