GOLD HOLDS NEAR $4,000 AHEAD OF FEDERAL RESERVE DECISION

Gold traded near $4,000 as investors awaited the US Federal Reserve’s interest-rate decision on Wednesday. Prices stabilised for a third consecutive session after falling more than 4% last week. That weekly decline was the largest in around four months, and gold reached its lowest level since mid-July. Investors are watching how the decision affects the US dollar and bond yields. Higher bond returns can weigh on gold because the metal pays no interest.

US Treasury observations put the 10-year inflation-adjusted yield at 2.66% on 23 October, up from 2.64% the previous day but below 2.74% a week earlier. The nominal 10-year yield rose from 4.96% to 5% over the same day, while the two-year yield rose from 4.65% to 4.69%. Those moves left inflation-adjusted returns below their level a week earlier, with both nominal yields higher than on Thursday. The $4,000 price level has drawn attention as traders assess whether gold will hold near it. Currency movements and demand for bullion also affect gold prices.

US Commodity Futures Trading Commission data published on Friday put managed money holdings on the COMEX at 120,970 long and 16,764 short standard gold futures contracts as of 20 October. That left a net long position of 104,206 contracts, down 2,883 from the preceding report. The September US consumer price index release recorded a monthly rise of 0.6% and a 12-month rise of 3.7% in the headline measure. Its core measure rose 0.3% over the month and 2.6% over 12 months. The Federal Reserve’s Wednesday announcement will provide the next scheduled policy decision watched by gold investors.