Gold hits one-week high, heads for weekly gain on bargain-hunting
GLD•Gold rose 1.4% to $4,190.49, its highest in a week, and was heading for a weekly gain of about 1.2% as bargain-buying emerged. Traders assessed the likelihood of further U.S. rate hikes, while U.S. 10-year Treasury yields eased from Wednesday’s more-than-two-decade highs.
1. Gold rebounds
Spot gold rose for a second straight session on Friday after hitting a two-month low on Wednesday. December U.S. gold futures also gained 1.4%, to $4,215.60 an ounce. Rhona O’Connell of StoneX said bargain-hunting had emerged after prices fell, with a floor building around $4,000.
2. Rate outlook and demand
St. Louis Fed President Alberto Musalem said the central bank would need to raise rates again to return inflation to its 2% target. Traders priced in a 19% chance of a rate increase in October and an 84% probability of at least one 25-basis-point increase by December. Gold demand in India was sluggish as prices rebounded, while trading in China was subdued during the holiday-shortened period.
