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Gold ends week little changed, clinging to mid $1,900, despite hawkish Fed

Investing.com — Gold prices ended the week little changed, rebounding from a one-week low, as markets continued their debate on whether the Federal Reserve’s final rate hike for the year would be in November or December.

“Weakening global growth prospects are (also) starting to attract some safe-haven flows towards bullion,” Ed Moya, analyst at online trading platform OANDA, said. “Gold has shown that the $1,900 level was a major line in the sand and now it appears to be poised to consolidate around the $1,950 level.”

Gold’s most-active futures contract on New York’s Comex, December, settled up $6, or 0.3%, at $1945.60 an ounce. For the week, it closed virtually flat, down 0.03%.

The spot price of gold was at $1,925.01 by 15:10 ET (19:10 GMT). Spot gold, determined by real-time trades in physical bullion and more closely followed than futures by some traders, was up $4.90, or 0.3%, on the day. For the week, it rose 0.1%.

“For gold to move back above the $2,000 level, investors will need to see major dollar weakness, which will be driven by evidence that the labor market is breaking,” Moya said.

Markets debating when next Fed hike will be

The Dollar Index hit six-month highs on Friday, limiting buying of dollar-denominated commodities by holders of other currencies. Offsetting some of the dollar’s charge was a decline in U.S. bonds, measured by the 10-year U.S. Treasury note, which hit its highest since 2007 before retreating.
Both yields and the dollar shot up this week after the Fed projected another quarter-percentage point rate increase by the year-end, despite leaving rates unchanged for September itself at a policy meeting on Wednesday.

“We are prepared to raise rates further, if appropriate," Fed Chairman Jerome Powell told a news conference on Wednesday. "The fact that we decided to maintain the policy rate at this meeting doesn't mean we have decided that we have or have not at this time reached that stance of monetary policy that we are seeking."

The Fed had raised interest rates 11 times between February 2022 and July 2023, adding a total of 5.25 percentage points to a prior base rate of just 0.25%. The central bank has forecast that U.S. rates will trend around 5.1% through 2024.

The Fed has two more policy meetings left for this year — in November and December. Markets are trying to guess which month the central bank would pick for what would be its last hike for 2023.

(Ambar Warrick l

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