Gold Tops $4,570 but Heads for Worst Monthly Drop Since 2008

Gold prices fell below $4,030 an ounce on Thursday as investors assessed a fresh batch of US economic data, with persistent inflation and resilient economic growth strengthening expectations of a potential interest rate hike later this year. The US PCE price index rose 0.5% month over month in September, its largest increase since March, while annual inflation climbed to 3.6%. Core PCE inflation also accelerated to 3.1% year over year. Meanwhile, US GDP grew at an annualized 3.4% in the third quarter, beating expectations of 3.2% on resilient consumer spending and AI-driven investment. The Federal Reserve held interest rates steady on Wednesday ahead of next week's US midterm elections, but markets continue to price in an approximately 80% chance of a rate hike in December, according to the CME FedWatch Tool. Meanwhile, oil prices declined after reports that US Vice President JD Vance had sought to revive peace negotiations with Iran.

Gold fell toward $4,000 an ounce on Thursday, giving back recent gains after the Federal Reserve kept interest rates unchanged as widely anticipated but provided limited guidance on its next policy move. Two officials also dissented in favor of a 25-basis-point rate hike, strengthening market expectations for a potential increase in December amid persistent energy-driven inflation. Meanwhile, Fed Chair Kevin Warsh indicated that the central bank could reduce the number of interest-rate decisions from eight to six annually, a proposal that could add to policy uncertainty. Investors are now awaiting the US PCE price index, the Fed’s preferred inflation measure, for further insight into the monetary policy outlook. Elsewhere, markets continue to assess renewed diplomatic efforts to prevent further escalation of the Middle East conflict. However, elevated oil prices remain a concern, sustaining inflationary pressures and expectations for higher interest rates, which could weigh on gold.

Gold prices fell toward $4,030 an ounce on Wednesday, hovering near three-month lows as investors digested the Federal Reserve’s decision to leave interest rates unchanged. A surge in oil prices further fueled inflation concerns, adding pressure to the precious metal. The FOMC voted 10–2 to maintain rates, reaffirming its commitment to bringing inflation under control without providing a clear signal on whether another hike could come in December. Meanwhile, oil prices climbed after an attack on a refinery in Saudi Arabia heightened concerns over potential supply disruptions, while Axios reported that the US and Israel could launch large-scale strikes on Iran unless a last-minute deal is reached. According to the CME FedWatch Tool, markets widely expect the Federal Reserve to raise interest rates for a second time this year in December.