Gold falls 0.4% to $4,123.39 as yields rise and markets await rate outlook
Key Facts
Spot gold fell 0.4% to $4,123.39 an ounce in Asian trading on Thursday morning, according to a Bloomberg report published by Moneycontrol, as U.S. Treasury yields rose ahead of the Federal Reserve's October meeting. Treasury prices fell across maturities, pushing yields higher as the precious metal declined, the report said. The decline followed Tuesday's session, during which spot gold was on track for a third consecutive session of losses, according to Investing.com. Market pricing put the probability of a quarter-percentage-point rate increase at the next meeting at less than one in six, pointing to rates remaining unchanged in October. Traders broadly expected a rate increase at the subsequent meeting in December, according to Bloomberg.
Expectations for a December rate increase extended to economists surveyed by Reuters in a poll published in October, with all 100 respondents forecasting an increase at that meeting. In the previous month's poll, fewer than half had expected the move, marking a shift in economists' assessments between the September and October surveys. Among central bank officials, Fed Governor Christopher Waller said 16 of the 18 participants who submitted rate projections in September expected at least one additional increase over the year's remaining two meetings. Fed Chair Kevin Warsh, meanwhile, stressed during an appearance in Bangkok ahead of the October meeting that he did not prejudge meeting decisions, according to the Associated Press. Warsh said: "I do not prejudge meetings, and I do not believe in saying now what I might do at them."
Those expectations follow an acceleration in U.S. consumer price increases to a seasonally adjusted 0.6% month on month in September, according to the U.S. Bureau of Labor Statistics. Prices had risen 0.4% in August, making September's monthly increase faster than the previous month's. The headline consumer price index rose 3.7% over the year ended in September before seasonal adjustment, the bureau said. Among the index's components, energy prices paid by consumers rose 5.2% month on month in September. That jump followed a 2.1% increase in August, with energy price gains also accelerating between the two months.
At the producer level, the U.S. final demand price index rose a seasonally adjusted 1.3% month on month in September, according to the Bureau of Labor Statistics. Final demand goods prices increased 2.6% on the month, the biggest gain since the data series began in December 2009. The rise in producer prices follows the Federal Reserve's September decision to raise its target interest rate range by a quarter of a percentage point, according to the U.S. central bank's statement. That decision brought the target rate range to 3.75%–4%, the level following September's increase. The decision statement was approved unanimously with 12 votes and no dissent, according to the Fed.
In earlier spending data, the core personal consumption expenditures price index, which excludes food and energy, rose 0.2% month on month in August, according to the U.S. Bureau of Economic Analysis. The upcoming schedule begins with the Federal Open Market Committee meeting on October 27–28, according to the Federal Reserve's official calendar. The meeting will be followed by the personal income and outlays report on October 29, 2026, according to the date set by the Bureau of Economic Analysis. The report covers September data and is scheduled for release at 8:30 a.m. Eastern Daylight Time. The subsequent Fed meeting takes place on December 8–9 and is accompanied by the release of the Summary of Economic Projections, according to the central bank's calendar.