FX.co ★ Gold Remains Volatile After Fed Decision

Gold hovered near $4,060 per ounce on Thursday, with prices remaining volatile after the US Federal Reserve left interest rates unchanged, as widely expected, while offering little clarity on its next policy steps. Two policymakers dissented in favor of a 25-basis-point hike, reinforcing market expectations of a possible rate increase in December amid stubborn, energy-driven inflation.

Fed Chair Kevin Warsh also signaled that the central bank may cut the number of rate-setting meetings from eight to six per year, a potential change that could heighten policy uncertainty. Investors are now awaiting the US PCE price index—the Fed’s preferred inflation gauge—for further insight into the future path of monetary policy.

At the same time, markets are monitoring renewed diplomatic efforts to prevent a further escalation of the conflict in the Middle East. Still, elevated oil prices remain a key concern, sustaining inflationary pressures and expectations of higher interest rates, which could in turn weigh on gold.