Gold Steadies After 6% September Drop as Soft PCE Data Eases Fed Hike Bets

Gold prices held roughly steady at the start of the new month after sliding 6% in September, according to Investing.com. The slide had been one of the metal's sharpest monthly declines in recent memory, and traders are now watching whether the softer U.S. personal consumption expenditures (PCE) inflation reading, the Fed's preferred inflation gauge, will stabilize prices. The PCE data came in weaker than expected, which investors read as reducing the odds of additional Federal Reserve interest rate hikes. Lower rate-hike expectations typically support gold, which pays no yield and becomes more attractive when borrowing costs are expected to stay low or fall. Elsewhere in currency and rate markets, the dollar got a lift from higher yields, a dynamic that can work against gold even as rate-hike bets ease. The tension between these two forces — softer inflation data pulling in gold's favor, higher yields pulling against it — remains unresolved heading into October.