Gold Stalls as Traders Weigh Inflation Risk and Interest Rate Hike

Gold prices steadied as investors weighed the risk of persistent inflation and the path for interest rates after the US Federal Reserve's first hike since 2023. The Fed raised interest rates by a quarter percentage point at their Sept 15 to 16 meeting, aiming to cool inflation that has not fallen below 2 per cent in over five years.

Several Fed policymakers are due to speak publicly this week, including Minneapolis Fed President Neel Kashkari and Chicago Fed President Austan Goolsbee. In a television interview, Kashkari said that inflation remains too high and pressures have broadened beyond the oil-price shock of the Iran war. 'The inflation that the American people are feeling every day is much beyond just oil prices. It's in all aspects of the economy,' he stated.

The price of gold was trading around $4,375 an ounce, after posting a moderate gain the week before. The Bloomberg Dollar Spot Index, a gauge of the US currency, was stable after rising 1 per cent the previous week. Analyst Justin Lin said that in this lull, gold will likely trade more closely off movements in oil prices and the broader inflation outlook.