Critical Week in Gold: Investors Eye Fed Meeting and Warsh's Remarks

While gold prices made a modest start to the new week in global markets, investors' eyes turned to the Fed's meeting on October 27-28. Fed Chairman Kevin Warsh's failure to signal new tightening weakened expectations for a rate hike.

The ounce price of gold, which lost 0.7 percent last week and closed at $4,165, made a modest start to the new week. As of 06:05 TSI, the ounce was priced at $4,177, while gram gold traded in the spot market started the day at 6,654 TRY. Expectations regarding the US Central Bank's interest rate decision, falling bond yields alongside concerns about the sustainability of artificial intelligence investments, and geopolitical risks were among the main factors affecting gold prices in the new week.

At the forefront of developments supporting gold prices were the remarks made by Fed Chairman Kevin Warsh in Bangkok on Friday. Speaking within the scope of the International Monetary Fund (IMF) and World Bank meetings, Warsh stated that the economic outlook had generally progressed in line with expectations since the September rate decision. Emphasizing that he did not pre-evaluate the decisions to be made at the remaining meetings of the year without signaling a new tightening regarding monetary policy, Warsh's statements weakened market expectations for a rate hike in October.

Markets are pricing in an approximately 84 percent expectation that the Fed will keep interest rates steady at its October 27-28 meeting. Gram gold is trading at 6,555 liras after starting the first day of the week with an increase. On Friday, moving within the band of 6,685 liras to 6,602 liras, gram gold completed the day at 6,631 liras, just below the previous close. Starting the first trading day of the week with buyers, gram gold is trading at 6,555 liras with a 0.4 percent increase compared to the previous close as of 09:30. As of the same minutes, quarter gold is being sold at 10,900 liras, and republic gold at 43,399 liras. Supported by the pullback in bond yields, the drop in oil prices, and the weakness in the dollar, the ounce price of gold is also trading at $4,180 with a 0.3 percent increase.