Gold prices recorded a decline during the beginning of Asian trading, today, Friday, recording an additional loss after falling by more than 1% in the previous session. This is under the pressure of the continued rise in inflation rates in the United States, which has strengthened expectations that the US Federal Reserve will move towards a new increase in interest rates.
In spot transactions, the yellow metal fell by 0.4%, reaching $4,006.06 per ounce, and US gold futures contracts for December delivery also fell by 0.3%, recording $4,018.50 per ounce. Despite this decline, gold is heading towards achieving modest weekly gains, while it continues to record losses for the second month in a row.
This performance comes in light of the acceleration of US inflation during last September, driven by increased costs of gasoline and consumer goods, which supports analysts’ expectations of an interest rate hike in the next December meeting. Data from the CME Police Fed Watch tool indicate that traders are pricing in a roughly 75% probability of approving this increase, at a time when high interest rates are weakening the attractiveness of gold as a non-returning asset.
At the global central level, the European Central Bank kept interest rates unchanged at its meeting yesterday, Thursday, with strong hints of approving a new increase in December due to the inflation risks associated with rising energy costs, while the bank officially announced that its president, Christine Lagarde, will relinquish her duties on the seventh of next February. In the same context, the Central Bank of Japan decided to stabilize interest rates, coinciding with the annual core inflation in the capital, Tokyo, exceeding the 2% barrier during the month of October, which reflects the ongoing inflationary pressures.
As for other precious metals, prices witnessed collective declines. Silver fell in spot transactions by 1% to $51.87 per ounce, while platinum stabilized at $1,488, and palladium fell by 0.5% to $1,000.75. Thus, the three metals are heading towards recording simultaneous weekly and monthly losses.
