Warsh Keeps the Door Open: Gold Near $4,180 and October Bets Below 20%

Gold traded near $4,180 per ounce on October 19, according to Markets.com.

Implied probabilities for a quarter-point rate hike in October dropped to less than 20% following comments from Federal Reserve Chair Kevin Warsh, as markets saw room in his statements to keep interest rates unchanged at the upcoming meeting.

However, Warsh did not commit to stopping the tightening and refused to pre-judge future decisions, keeping the option of a rate hike on the table. This comes after September inflation kept further tightening in play.

The US dollar and Treasury bond yields remain among the primary factors influencing gold, alongside US inflation data and the upcoming Fed decision, according to the report.

What Do These Terms Mean?

Federal Reserve: The central bank of the United States responsible for monetary policy and interest rates.

Interest Rate Hike: An increase in borrowing costs decided by the central bank to curb inflation.

Treasury Yield: The return an investor earns on a government bond, a rise in which makes gold less attractive.

Inflation: The sustained rise in the prices of goods and services, measured by the Consumer Price Index.