Gold falls toward $4,040 as Fed outlook leaves traders awaiting inflation data

 Gold prices fell on Thursday after the Federal Reserve held interest rates steady but offered limited clarity on its next move, leaving investors uncertain about further tightening before year-end as they awaited fresh inflation data.

At 00:51 ET (04:51 GMT), spot gold fell 0.7% to $4,038.49 an ounce, while U.S. gold futures slipped 0.1% to $4,049.72. Silver declined 1.4% to $53.2295 an ounce, while platinum dropped 1.4% to $1,520.17. Spot palladium fell 0.7% to $1,009.02, while palladium futures lost 1.1% to $1,002.25. The U.S. dollar Index edged up to 102.20.

Spot gold fell after posting modest gains for three consecutive sessions. The Federal Open Market Committee voted 10-2 to keep its benchmark interest rate unchanged, a decision markets had largely anticipated.

However, Chair Kevin Warsh said the Fed could reduce its scheduled policy decisions from eight to six annually starting next fall.

Traders continue to anticipate a rate increase in December as persistently high energy prices complicate efforts to bring inflation under control.

Investors will look to Thursday’s September personal consumption expenditures price index, the Fed’s preferred inflation gauge, for further clues on the likely direction of rates before year-end.

Gold also remains vulnerable to broader equity-market selloffs as investors assess whether heavy artificial intelligence spending is weighing on corporate cash flow.

Last week’s AI-driven stock rout prompted some investors to sell gold to cover losses elsewhere, helping push bullion to its lowest level since July. Gold has fallen 2.5% in October and is on track for a second consecutive monthly decline.

Central-bank buying remains an important source of longer-term support. Goldman Sachs estimates that central banks purchased 79 tonnes of gold in August, nearly five times the average monthly volume before 2022, with China accounting for 25 tonnes.

Rick Kanda, managing director of The Gold Bullion Company, said sustained central-bank demand could help gold appreciate over time or at least provide a firm price floor.

He noted that central-bank purchases add to demand alongside interest rates, investor confidence and geopolitical uncertainty. “However, sustained central bank demand could nevertheless help maintain prices over the long term.”