The price of each ounce of gold reached $3998.35, falling below the $4000 mark for the first time since mid-July. This price decrease marks the worst weekly performance for gold since June, as the price of this precious metal dropped four percent last week.
Gold Market Situation and Its Impacts
In the U.S. futures market, the price of each ounce of gold for December delivery closed at $4007.90, down 1.3 percent. Meanwhile, the price of Brent crude oil has reached its highest level in over five months. Jim Wyckoff, a market analyst at American Gold Exchange, stated that increasing concerns about inflation indicate that the world's major central banks cannot quickly ease their monetary policies. All these factors are detrimental to traders looking for price increases in the gold and silver markets.
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Expectations from the Federal Reserve Meeting and Its Impact on Markets
Currently, the S&P 500 and Nasdaq indices in the U.S. fell to their lowest levels in five weeks on Friday. Traders largely expect the Federal Reserve to keep interest rates unchanged at the meeting on October 27 and 28. However, the release of U.S. consumer and producer inflation statistics in the past two weeks has increased the likelihood of more contractionary monetary policies being adopted later this year. According to the CME FedWatch Tool, the probability of interest rates remaining unchanged at next week's meeting is estimated at 92 percent, while the likelihood of a rate hike in December is 78 percent.
The report on the U.S. Personal Consumption Expenditures (PCE) index, which is the Federal Reserve's preferred measure of inflation and is set to be released on October 29, may provide more clues about monetary policies.
In Asian markets, gold purchases in India increased last week due to rising demand. In China, the world's largest gold consumer, physical demand remains stable, but consumer caution continues to limit spending on jewelry purchases.
In the market for other precious metals, each ounce of silver fell by one percent to $53.97. Additionally, each ounce of platinum decreased by 0.9 percent to $1555.84, and each ounce of palladium also fell by 0.5 percent to $1048.31. All three precious metals experienced a decline in weekly growth.
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