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Gold eases for sixth session as dollar marches upward, markets eye Fed minutes

Odds of 25 bps US rate cut in November at 84%

Published: Wed 9 Oct 2024, 7:47 PM

Updated: Wed 9 Oct 2024, 7:49 PM

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  • Reuters

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Gold retreated for the sixth straight day on Wednesday on an advancing dollar and diminished expectations for a larger rate cut in November while markets awaited minutes from the Federal Reserve’s September policy meeting for further insights.

Spot gold fell 0.2 per cent to $2,615.83 per ounce by 11:07 a.m. ET (1507 GMT). US gold futures for December delivery was steady at $2,634.40.

The dollar index hit a near two-month high, making bullion more expensive for holders of other currencies.

“The dollar index continues to firm up, and economic data is more supportive for a 25 basis point cut,” said Phillip Streible, chief market strategist at Blue Line Futures.

If the Fed minutes are extremely dovish and it seems pressured to cut rates aggressively, that could act as a tailwind for gold and could push prices to the $2,650 level, he added.

Investors now await the minutes from the Fed’s Sept. 18 policy meeting, due at 1800 GMT, while the US Consumer Price Index (CPI) and Producer Price Index (PPI) data is due on Thursday and Friday, respectively.

Zero-yield bullion is a preferred investment amid lower interest rates.

Following last week’s robust jobs report, markets are expecting an 84 per cent likelihood of a 25-basis-point cut and discounted a 50-bps cut at the Fed’s November meeting, according to the CME FedWatch tool.

“Despite the modest pull-back, expectations of lower interest rates and ongoing geopolitical tensions suggest the backdrop for gold is likely to remain supportive over the long term,” said Kinesis Money market analyst Carlo Alberto De Casa in a note.

Meanwhile, a rebound in gold prices to a record peak dashed the Indian bullion industry’s expectations of a lucrative festival season.

In other metals, spot silver lost 0.1 per cent to $30.67 per ounce. Platinum was up 0.3 per cent to $952.95, and palladium rose 1.1 per cent to $1,032.00.



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