On October 8, gold's sensitivity to the interest rate path once again came into focus.
According to GTC Zenhui Capital, meeting minutes reported by Kitco on October 7 showed that most participants believed further rate hikes this year could be appropriate, but subsequent decisions would still depend on incoming data.
At the time of the report, spot gold was trading at approximately $4,110.38 per ounce, down 1.28% on the day, with prices still near the lower end of the session's range.
The sources of inflationary pressure deserve closer examination.
In the view of GTC Zenhui Capital, AI-related construction is expanding investment demand, which could keep costs for certain core goods resilient; if such pressure spreads from a small number of industries, it would become harder for the market's expectation of sustained high rates to fade quickly.
The minutes reflect September discussions, not a new October decision.
Moreover, the minutes offered relatively steady assessments of growth and the labor market, meaning the trade-off between fighting inflation and supporting a slowing economy still needs to be continuously updated through subsequent data and cannot be locked in advance.
Gold itself generates no interest, so when cash and bond yields become more attractive, the threshold for holding it typically rises.
However, nominal rates are only one part of the pricing equation. Changes in inflation expectations affect real yields, while dollar movements and fund positioning can also alter short-term performance. A single price decline cannot be attributed entirely to one factor.
Going forward, the focus should shift from the wording of the minutes to fresh data.
GTC Zenhui Capital notes that whether employment remains stable, whether core prices can cool, and whether long-end yields stay elevated will jointly determine the opportunity cost facing gold.
There remains a gap between meeting expectations and final decisions, and intraday quotes do not represent a clear medium-term trend.
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