Gold Declines Following Fed Decision: All Eyes on PCE Inflation Data

Gold prices fell on Thursday after the US Federal Reserve (Fed) kept its policy rate steady in the 3.75-4.00 percent range. Spot gold fell to the level of $4,030 per ounce, while gram gold found buyers at 6,458 liras. Markets focused on the upcoming Personal Consumption Expenditures (PCE) inflation data.

The US Federal Reserve (Fed) kept its policy rate steady in the 3.75-4.00 percent range in line with expectations. While the bank made no changes to borrowing costs as it waits for further data on the inflation outlook, pricing for a rate hike in December dropped from 84 percent to approximately 78 percent according to CME FedWatch data.

Following the Fed's rate decision, as of Thursday at 09:40, spot gold fell by 0.9 percent down to the $4,030 level. Around the same time, gram gold traded at a buying price of 6,403.96 liras and a selling price of 6,458.86 liras. Investors are monitoring the statements by Fed Chair Kevin Warsh and the effects of developments in the Middle East on inflation.

The Personal Consumption Expenditures (PCE) price index, which is in the focus of the markets and closely monitored by the Fed in line with its 2 percent inflation target, is expected to be released. Ajay Kedia, Director at Kedia Commodities, stated that the uncertainties created by the war in the Middle East and investors readjusting their positions ahead of the inflation data affected gold prices.