Gold hits 7-week low as oil-driven inflation fears boost rate-hike bets
GLD•Gold fell more than 3% to its lowest in over seven weeks as higher oil prices stoked inflation fears and boosted expectations for US rate hikes. Traders saw a 70.3% chance of a Fed rate hike in October.
1. Gold extends losses
Spot gold was down 3.1% at $4,155.67 per ounce as of 1031 GMT, after touching its lowest since August 5. US gold futures for December delivery also fell 3.1%, to $4,188.10.
2. Oil and rate expectations
Higher oil prices and increased bets on further US rate hikes were cited as the main drivers of gold’s recent weakness. Brent crude rebounded after US President Donald Trump rejected an Iran peace deal aimed at resolving the conflict and reopening the Strait of Hormuz. The dollar held firm and US Treasury yields extended gains.
3. Data in focus
Traders saw a 70.3% chance of a Fed rate hike in October, according to CME’s FedWatch Tool. Investors were focused on US job openings, ADP employment, PCE readings and nonfarm payrolls due during the week. Spot silver fell 4.6% to $61.32 per ounce.
