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Gold edges lower ahead of Fed rate decision, Warsh comments

By Reuters News

By Noel John

Oct 28 (Reuters) - Gold was subdued on Wednesday as higher oil prices weighed, while market participants awaited the US Federal Reserve's policy decision and comments from Chair Kevin Warsh for clues on the path of interest rates.

Spot gold edged 0.3% lower to $4,044.54 per ounce by 11:46 a.m. EDT (1546 GMT). US gold futures for December delivery fell 0.4% to $4,057.30 per ounce.

The US central bank will announce its rate decision at 2 p.m. EDT (1800 GMT), followed by a press conference by the Fed chief.

"We see a very low likelihood that the US central bank is going to lift rates today, but December is on, March is on as well. So for now, we (prices) stay anchored to the lower bound of the range," Bart Melek, global head of commodity strategy at TD Securities, said.

The Fed is widely expected to leave its benchmark interest rate unchanged in the 3.75%-4.00% range, with traders pricing in an 84% probability of a hike in December, according to CME's FedWatch Tool. FEDWATCH

Attention is also turning to US Personal Consumption Expenditures data due on Thursday, which could offer further insight into the trajectory of monetary policy.


Meanwhile, oil prices rose over 1%, stoking inflation concerns, after an attack on a refinery in Saudi Arabia renewed concerns about supply risks linked to conflicts in the Middle East. O/R

"Higher inflation ultimately means that the Fed will be forced to take decisive action in December and in March. And beyond that, much will depend on how quickly the conflict in the Middle East comes to some sort of resolution," Melek added.

Higher rates increase the opportunity cost of holding non-yielding gold.

Analysts lowered their 2026 precious metals price forecasts in Reuters polls, citing weaker demand, elevated Treasury yields and a strong US dollar, though all the metals are still expected to rebound in 2027. PREC/POLL

Elsewhere, China's net gold imports via Hong Kong in September rose more than 28% from August to a five-month high, due to restocking ahead of the Golden Week holiday, with additional support from investor demand.

Among other metals, spot silver slid 1.2% to $53.71 per ounce, platinum gained 0.2% to $1,542.80, and palladium fell 0.7% to $1,019.03.


Spot Gold vs Brent Crude https://tmsnrt.rs/4kjsBjA

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