Gold slips to $4,104 as Fed minutes keep hikes in play

Key points

• Spot gold fell 1.5% to $4,104 by 19:50 UTC, from Tuesday's close of $4,165.30
• It touched a low of $4,070.60 at 12:48 UTC before buyers stepped back in
• Fed minutes showed most officials saw room for one more hike before year-end
• Gold is 5.2% lower this year and about 24% below its 29 January closing high

Gold fell on Wednesday, slipping to $4,104 an ounce by 19:50 UTC (23:50 in Dubai), according to globalgoldprices.com data. That leaves spot $61 below Tuesday's close of $4,165.30, a drop of 1.5%.

Why it matters: Each sign that the Fed is not done raising rates tends to lift Treasury yields and the dollar, and both make a metal that pays no interest harder to hold. For buyers who have been waiting for a dip, the price is now back near its September lows.

How the day unfolded

Gold opened the UTC day at $4,167.50 and drifted lower through Asian and European trading. By 11:00 UTC it had slipped to $4,118.50.

The sharpest drop came as New York trading got going. Spot touched $4,070.60 at 12:48 UTC, almost $97 below the open. Buyers stepped in within minutes, and gold was back at $4,087 by 13:00 UTC and above $4,100 by 15:00 UTC.

From there it held a tight band. The price sat at $4,110.50 at 17:00 UTC, $4,110.40 at 18:00 UTC and $4,111 at 19:00 UTC, before easing to $4,104 late in the evening.

The minutes kept hikes on the table

The Federal Reserve published the minutes of its September meeting at 14:00 New York time (18:00 UTC). At that meeting the Fed raised its target range by a quarter point to 3.75% to 4.00%, its first increase since 2023.

According to Reuters, policymakers were divided over the logic of the move. Some saw it as insurance against inflation staying too high, others as the start of a tighter stance. Most participants saw room for one further rise before the end of the year, though they did not treat September as the first step in a rapid series of hikes.

There is a timing wrinkle. The debate took place before softer August inflation data and a weak September jobs report were published, so the minutes describe a Fed that had less evidence of cooling than it has now.

Gold barely reacted to the release itself. The bigger move had already happened in the morning.

Yields and the dollar do the damage

Most of the pressure on gold over the past month has come from the bond market. The US 10-year Treasury yield rose 53 basis points to 5.3% in September and the dollar index gained 2%, the World Gold Council said in its monthly ETF report. On the council's figures, gold ended September at $4,176, down 8.5% on the month.

Rate expectations have swung with each data point. After September payrolls showed just 29,000 jobs added, CME FedWatch data put the chance of an October hike at about 17%, down from roughly 36% a week earlier, CNBC reported on 2 October.

Oil adds a second channel. Crude shipments through the Strait of Hormuz averaged about 10.3 million barrels a day in the week to Saturday, around 23% below the pre-war level, according to Kpler data reported by CNBC. Expensive energy keeps inflation worries alive, and those worries keep hike bets alive.

Where the price stands

Spot gold in US dollars per ounce, latest $4,104 at 19:50 UTC on 7 October. Source: globalgoldprices.com price data.

Wednesday's low of $4,070.60 is the lowest price in the site's intraday data so far this month. The lowest daily close since June was $3,993.55 on 16 July, which puts the $4,000 area in view if selling resumes.

What to watch

• 9 Oct: CFTC positioning report, which shows whether hedge funds kept trimming gold longs
• 14 Oct: US September CPI, the next test for hike bets after these minutes
• 28 Oct: Fed decision, where futures pricing currently leans toward a hold