Gold Drops More than 2% on US Rate-Hike Bets
Rising oil prices and higher Treasury yields pushed bullion lower as traders priced in a 94% chance of a December rate hike, CME FedWatch Tool showed.
- Spot gold steadied around $4,359 an ounce on Friday, recovering slightly after hitting a seven-week low Monday as Federal Reserve officials reinforced a hawkish 'higher-for-longer' stance.
- Geopolitical tensions surrounding the seven-month US-Iran conflict maintain upward pressure on oil prices, fueling inflation risks that complicate central bank decisions and dampen bullion's safe-haven appeal.
- Federal Reserve officials raised benchmark rates 25 basis points to 4.00% last month, while the 10-year Treasury yield recently surged above 5%, increasing the opportunity cost of holding gold.
- VT Markets strategist Ross Maxwell stated, "Investors are currently focused on the Fed's higher-for-longer stance," as analysts observe rising energy prices and bond yields continue pressuring gold.
- Traders monitor upcoming US economic data, including job openings and nonfarm payrolls due this week, for signals on whether persistent inflation will prompt further policy tightening.
265 Articles
265 Articles
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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…
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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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