Gold Futures Settle Higher For 4th Straight Day As Dollar Stays Weak

Gold futures settled higher on Tuesday, gaining for a fourth straight session, as the dollar stayed weak ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is widely expected to pause on rate hikes, with CME Group’s FedWatch Tool currently indicating a 99% chance the Fed will leave rates unchanged.

Meanwhile, the likelihood of another rate hike in November has seemingly decreased in recent days, with the FedWatch Tool currently indicating just a 28.8% chance of a quarter point rate increase.

The Bank of England and the Bank of Japan are scheduled to make their policy announcements on Thursday.

Gold futures for December ended higher by $0.30 at $1,953.70 an ounce, the highest settlement in more than two weeks.

Silver futures for December ended down $0.042 at $23.456 an ounce, while Copper futures for December settled at $3.7470 per pound, down 0.0320 from the previous close.

“The risks for headline inflation to heat up over the next couple of months are rising and that should complicate what the Fed does,” said Edward Moya, senior market analyst at OANDA.

“Do policymakers become convinced that despite a resilient labor market, pricing pressures will continue to ease?” he added. “If core inflation shows it is struggling to continue to drop, the higher-for-longer rate regime will last a lot longer than the market is pricing in.”

Data from the Commerce Department showed housing starts plunged by 11.3% to an annual rate of 1.283 million in August after jumping by 2% to a revised rate of 1.447 million in July. Economists had expected housing starts to decrease to an annual rate of 1.440 million from the 1.452 million originally reported for the previous month.

Another report from the Commerce Department said building permits surged by 6.9% to an annual rate of 1.543 million in August after inching up by 0.1% to a revised rate of 1.443 million in July.

Building permits, an indicator of future housing demand, were expected to rise to an annual rate of 1.445 million from the 1.442 million originally reported for the previous month.

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