Gold Drops 1.1% Amid Fed Watch and 86% Bet on December Rate Hike
Gold futures dropped $45.20 to $4,015.20 per ounce, and gold on the MCX exchange fell 1.9%, as markets priced in an 86% probability of a U.S. interest rate hike in December.
Gold futures fell $45.20, or 1.11%, to $4,015.20 per ounce, while gold on India's MCX exchange closed down 1.9% at 143,309 rupees, according to Investing.com citing Kedia Advisory.
Silver futures dropped 1.59% to $54.13 per ounce, as inflation concerns stemming from rising oil prices intensified ahead of the U.S. monetary policy decision.
Traders priced in an 86% probability of a rate hike in December, while Goldman Sachs expects a 25 basis point increase. Net speculative long positions on the COMEX fell by 3,741 contracts to 111,079 in the week ended October 13.
In India, local price premiums reached up to $7 per ounce, while China's central bank extended its buying streak for the twenty-third consecutive month.
What Do These Terms Mean?
Futures Contracts: An agreement to buy or sell an asset at a specified price today for delivery at a later date, used for hedging or speculation.
Basis Point: A unit of measure for interest rate changes, where 100 basis points equal 1%, so 25 basis points represent a quarter of a percentage point.
Net Long Positions: The difference between buy (long) contracts and sell (short) contracts held by speculators, monitored as an indicator of trading trends.
Price Premium: The difference between the metal's local price and global price, reflecting the supply and demand balance in the domestic market.
Weekly Newsletter
Read between the lines before everyone else. Decode the most important economic, tech, and decision-maker movements in the region.. in 5 minutes every Saturday.
