Gold on track for weekly loss as Fed rate hike expectations build
GLD•Spot gold was down about 2% for the week as rising U.S. Treasury yields and expectations of further Federal Reserve rate hikes weighed on the metal. It edged up 0.3% to $4,291.06 per ounce on Friday.
1. Gold slips for the week
Spot gold was on track for a weekly loss on Friday, despite rising 0.3% to $4,291.06 per ounce by 0844 GMT. U.S. gold futures gained 0.7% to $4,326.60. U.S. Treasury yields hovered near a two-decade high, increasing the opportunity cost of holding gold.
2. Rate hike expectations
The Federal Reserve raised rates by a quarter-point last week, its first hike in three years, and signaled further increases. Traders priced in a 71% chance of an October hike and a 95% chance of a December increase. Higher rates can dampen gold demand as investors shift to yield-bearing assets.
3. Other market factors
U.S. and Iranian negotiators were seeking a deal involving Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, sources close to the talks said. Gold demand in India picked up modestly as lower prices drew buyers ahead of the festive season. Silver and platinum rose on Friday while palladium fell, and all three metals were poised for weekly losses.
