Gold Drops More than 2% on US Rate-Hike Bets
Stronger rate-hike expectations, a firmer dollar and higher Treasury yields pushed bullion lower as traders priced a 70% chance of another Fed move.
- On Thursday, spot gold traded near $4,359 an ounce, rebounding after easing oil prices and cooling Treasury yields drew investors back to bullion following earlier pressure.
- The Federal Reserve raised its benchmark rate by 25 basis points to 3.75%-4.00% on September 16, 2026, marking the first hike since 2023 and pressuring non-yielding assets like gold.
- Crude oil surged above $100 a barrel amid US-Iran war tensions, fueling inflation concerns that complicate the Fed's interest rate path and support safe-haven demand for gold.
- Amy Gower, head of metals and mining strategy at Morgan Stanley, maintains a positive 12-month outlook for gold despite near-term volatility from persistent inflation and policy tightening.
- Markets currently price in roughly 70% probability of another Fed rate hike in October, as officials warn that persistent supply shocks may require further restrictive policy ahead.
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262 Articles
Gold Is Down 10% in Six Months: Morgan Stanley Says 3 Forces Could Support a Comeback.
They are persistent demand from central banks and China, concerns over government debt and fiscal sustainability, and the possibility that easing inflation pressures eventually push bond yields lower.
Gold Trades Near Seven-Week Low as Rate-Hike Pressure Mounts
Gold edged higher after touching a more than seven-week low on Monday as a selloff of US Treasuries stabilized, even as expectations remained high the Federal Reserve will keep tightening policy to rein in inflation.
While the price of gold broke record after record at the beginning of the year, the price of the precious metal is now well below record levels. Earlier this year, gold peaked at around $5,400 per troy ounce; now, only $4,140 remains. For a long time, the precious metal gleamed as a safe haven, but investors are abandoning gold en masse for government bonds. The culprit? Sharply rising capital market interest rates and increasing panic in the bo…
Precious metal has fallen by more than 10% since August, in parallel with the rise in oil and expectations of higher rates
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