Gold Edges Higher as Traders Ease Rate‑Hike Bets After Kevin Warsh’s Speech

Spot gold slipped a modest 0.7% in the week ending October 18, but the metal found a foothold early this week, trading just above the $4,180‑per‑ounce mark. The modest bounce came after Fed Governor Kevin Warsh hinted that the Federal Reserve might hold rates steady at its upcoming meeting, prompting traders to trim their bets on a quarter‑point hike.

When the Fed’s chair‑to‑be spoke, market participants interpreted his remarks as a nudge toward a more dovish stance. In plain English, the odds of a rate increase this month fell to less than 20 percent, a sharp downgrade from the one‑in‑three odds that had been floating around just a few days earlier.

Why does that matter for gold? Higher interest rates make non‑yielding assets like bullion relatively less attractive, because they raise the opportunity cost of holding a metal that pays no interest. So when the prospect of a rate hike receded, the safe‑haven appeal of gold regained a little of its shine.

The metal has been buoyed by its $4,000‑per‑ounce support level ever since August, a threshold that has held despite a war‑driven sell‑off earlier in the year. Even so, gold remains down roughly 20 percent from its peak before the US‑Iran tensions flared in February.

In Singapore at 7:35 a.m. local time, spot gold was quoted at $4,180.97 per ounce, up 0.4 percent from the previous session. Silver wasn’t far behind, climbing 0.6 percent to $57.33 an ounce, while both platinum and palladium posted modest gains. The Bloomberg Dollar Spot Index, which tracks the greenback against a basket of currencies, barely moved after slipping 0.3 percent the week before.

Overall, the market’s reaction to Warsh’s comments underscores how closely gold’s fortunes are tied to the ebb and flow of monetary‑policy expectations. As long as the Fed’s next move remains uncertain, the metal’s safe‑haven status will likely keep it perched near that critical $4,000 support level.