On Wednesday (October 9), the spot gold price significantly declined by nearly 15 dollars, continuing a six-day downward trend. With the release of the latest Federal Reserve meeting minutes, market expectations for the Fed to keep rates unchanged in November increased markedly, strengthening the dollar and negatively impacting gold prices. By the close of Wednesday, spot gold was reported at $2607.71 per ounce, a drop of 0.54%.
The Federal Reserve's September meeting minutes revealed internal disagreements over the extent of rate cuts, despite ultimately deciding to lower by 50 basis points, some officials preferred a modest cut of 25 basis points. This has made the market more cautious about the future direction of monetary policy. The CME FedWatch Tool shows the probability of a 25 basis point cut in November fell from 85.2% the previous day to 75.9%, further reinforcing expectations that rates might remain unchanged.
With the rise in US Treasury yields and the dollar index, the gold market faces greater pressure. The 10-year US Treasury yield increased to 4.062%, and the dollar index rose to 102.90, the highest level since August. Traders are now focusing on Thursday's release of the US September Consumer Price Index (CPI), the results of which may influence market judgments on the Fed's next move.
Market forecasts suggest the US September CPI year-over-year increase will drop to 2.3%, while the core CPI is expected to rise 0.2% month-over-month. Additionally, initial jobless claims data will also be a focal point, with expectations that initial claims will rise to 230,000.
Analysts note that gold prices are currently in a bearish trend. If gold prices fall below $2600 per ounce, they may further dip to $2550 per ounce. Conversely, if gold prices rebound and break above $2650 per ounce, they could challenge $2670 per ounce or even higher.
