Gold prices currently remain stagnant as investors await the Federal Reserve's upcoming interest rate decision. Rick Kanda, managing director at The Gold Bullion Company, notes that the market is closely monitoring potential signals regarding a possible rate hike in December.
According to CME FedWatch data, there is an 83.6% probability that the central bank will raise interest rates at its December meeting. Traders assign a 77.7% chance to a 25-basis-point increase, which would bring rates to a range of 4% to 4.25%.
Kanda explains that higher interest rates typically reduce the appeal of non-income-generating assets like gold. Conversely, a dovish stance from policymakers could provide support for the metal's price in the near term.
Despite potential short-term volatility, Kanda expects gold to recover over the long term. He cites geopolitical uncertainty, central bank demand, and the metal's role as a portfolio diversification tool as key factors that will sustain its value.
