FX.co ★ Gold Edges Lower on Fed Rate Hike Concerns

Gold prices fell toward $4,000 per ounce on Friday, extending the previous session’s losses as stubborn inflation and solid US economic growth bolstered expectations of a possible Federal Reserve rate hike later this year. The US PCE price index rose 0.5% month-on-month in September, its largest increase since March, while the annual rate accelerated to 3.6%. Core PCE inflation also picked up, reaching 3.1% year over year.

At the same time, US GDP grew at an annualized pace of 3.4% in the third quarter, beating forecasts of 3.2%, driven by resilient consumer spending and robust AI-related investment. The Federal Reserve left interest rates unchanged on Wednesday ahead of next week’s US midterm elections, but futures markets still reflect roughly a 75% chance of a rate hike in December, according to the CME FedWatch Tool. Gold is on track to fall nearly 4% in October, putting it on course for a second consecutive monthly decline.