Gold posted a monthly loss of more than 6% in September, snapping a two-month winning streak, as a firmer dollar, a rout in Treasury bonds, and surging oil prices weighed on the metal. Cooler-than-expected inflation data on Wednesday offered some relief by dimming the odds of an October rate hike.
Spot gold dipped 0.6% to settle at $4,158.70 an ounce on Wednesday, while gold futures added 0.2% to close at $4,189.10. Both contracts declined 6.5% for the month.
October hike bet fades on cooler inflation data
Wednesday's data deluge reduced the odds of a Federal Reserve rate increase next month. According to the U.S. Bureau of Economic Analysis, the headline personal consumption expenditures price index rose 0.3% month over month and 3.4% year over year in August, below estimates of 0.4% and 3.7%. The core PCE index climbed 0.2% month over month and 3% year over year, also under the 0.3% and 3.3% consensus.
The agency also revised Q2 GDP growth up to 2.2% from 1.5%, above the 1.5% economists had expected. Separately, ADP reported 90,000 private jobs added in September, the first acceleration in hiring since May, after employers added just 36,000 jobs in August.
As a result, the probability of a quarter-point hike next month fell to about 37% from nearly 51% the previous day, according to the CME FedWatch tool. New York Fed President John Williams had already signaled the shift on Tuesday, saying there was "no need for urgency" for more rate hikes.
Oil's September surge adds to the pressure
Gold also lost ground to a rally in oil. Brent crude futures for November delivery rose more than 14% for September.
The rally followed a lack of diplomatic breakthroughs between Washington and Tehran, after hopes of a deal ahead of the United Nations General Assembly gave way to fiery speeches from President Donald Trump and Iranian President Masoud Pezeshkian. Still, gains were capped after Saudi Arabia restarted its East-West Pipeline following attacks on its energy infrastructure. JPMorgan analysts noted regional exports now stand 11% below pre-war levels.
Source: Commodities & Futures News
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