Spot gold fell 0.4% to $1,650.55 per ounce.while US gold futures were down 0.1% at $1,655.
The dollar was up 0.1% against a basket of six currencies, making bullion more expensive for foreign buyers, while 10-year bond yields hovered near recent highs.
“The market is still in waiting mode (…) what signal will the Fed give regarding the weakness it is seeing in the economy (…) which in the short term should be a support for gold”, said Edward Moya of OANDA. Still, “inflation is a tough beast to kill. The Fed is going to take its time with these rate hikes before signaling a turn.”
Markets have already priced in a 75 basis point rate hike by the Fed in November, but are now lowering bets on a similar increase in December, after news that central bankers are likely to debate the size of future hikes.
A survey showed US business activity contracted for the fourth consecutive month in October, the latest evidence of an economy weakening in the face of high inflation and rising rates.
Gold: how much could it climb in the event of a strong recession in the US
“Gold could rise to as high as $2,250 per ounce in the event of a sizeable recession in the US and fall to $1,500 in a very aggressive Fed scenario”said Goldman Sachs in a note.
In the first scenario, the rise would be 36% compared to current prices, while in the second scenario the drop would be less than 10% in relation to today’s values.
In other precious metals, meanwhile, spot silver fell 0.8% to $19.24 an ounce; palladium was down 2% at $1,978.93; and platinum fell 0.6% to $926.88.
Source: Ambito
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