Gold edges up as markets await Fed rate clarity

Spot gold advanced 0.4% to $4,127.40 per ounce on Thursday, recovering from the previous session’s decline. The metal had touched its lowest point since August 5 earlier in the week, pressured by a stronger dollar and rising US Treasury yields.

Fed minutes reveal policy divisions

Market participants are assessing the trajectory of interest rates after the release of the Federal Reserve meeting minutes. The document indicated that policymakers were split last month regarding the rationale for raising rates. Some members argued that hikes were necessary to counter energy price shocks and other external disruptions. A more hawkish faction contended that higher rates were essential to guard against emerging demand-driven inflation.

US gold futures for December delivery climbed 0.3%, settling at $4,150.60. Higher interest rates typically diminish the appeal of non-yielding assets like gold.

Trader expectations for rate hikes

Data from the CME Group’s FedWatch tool shows traders assigning an 18% probability to a rate increase later this month. However, the likelihood of a hike in December remains high at 80%. This uncertainty continues to influence precious metals trading.

IMF warns of global economic risks

International Monetary Fund Managing Director Kristalina Georgieva cautioned that the global economy faces threats from sustained high energy prices and record public debt levels. She also highlighted risks associated with the surge in artificial intelligence investment. Georgieva urged governments to implement preventive measures through fiscal and monetary policies.

Silver and platinum gains

Other precious metals also posted gains during the session. Spot silver increased 0.4% to $60.39 per ounce. Platinum rose 1.4% to $1,653.88, while palladium gained 1.4% to reach $1,141.00.