Gold futures on Friday posted their lowest close in more than three weeks, trimming a monthly gain to end October on a downbeat note.
December gold fell $5.90, or 0.5%, to settle at $1,141.40 U.S. an ounce on Comex, after shedding a whopping $28.80, or 2.5% Thursday. Gold saw a weekly loss of about 1.8%, trimming its monthly gain to 2.4%. The yellow metal is down around 3.7% since the end of last year, based on most-active futures contracts.
The Fed’s policy statement late Wednesday had surprised investors, putting an interest-rate hike of benchmark interest rates in play at the central bank’s next policy meeting in December. Elevated rates can diminish the appeal of gold for yield-hungry investors because the metal doesn't offer interest.
The Fed has taken a more hawkish stance, signaling a hike in December but also, the Bank of Japan “did not bring in new stimulus overnight as some had been thinking” and the European Central Bank “stimulus speculation has subsided a bit and the euro has started to recover,” one expert said.
A weaker-than-expected reading of U.S. third-quarter gross domestic product, which came in at 1.5% on Thursday, might be supportive of gold going forward since it might bolster gold’s haven appeal. The disappointing data may also prompt the Fed to further delay a rate increase.
On Friday, the personal-consumption expenditures, or PCE, index—a key inflation indicator for the Fed—declined 0.1% and is up 1.4% over the past year. The Fed is watching PCE as it targets inflation of around 2% before it lifts rates.
Elsewhere, December silver shed 1.7 cents, or 0.1%, to $15.567 U.S. an ounce, for a roughly 7.2% monthly gain—its best since January.
December copper finished at $2.318 U.S. a pounce, down less than half a cent. For the month, copper lost 1%.
January platinum fell $4.20, or 0.4%, to $989.10 U.S. an ounce, for a monthly climb of about 8.8%, while December palladium added $6.45, or 1%, to $677.25 U.S. an ounce, up around 4% for the month.
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