Gold rebounds after sharp selloff though Fed hike bets weigh
GLD•GLD•GLD•GLD•Spot gold rose 0.3% to $4,044.56 an ounce after falling nearly 3% on Tuesday, while traders put the probability of a December Fed rate increase at 100%, up from 84% before the inflation data.
Spot gold was up 0.3% at $4,044.56 per ounce by 0451 GMT on Wednesday, after falling nearly 3% to $4,017.21 on Tuesday. US gold futures for December delivery gained 0.6% to $4,052.50. An analyst attributed the rebound to a technical retracement after Tuesday’s losses.
US inflation accelerated more than expected in October, and traders priced in a 100% probability of a Fed rate increase in December, up from 84% before the data. Higher interest rates raise the opportunity cost of holding non-yielding gold. Fed Vice Chair of Supervision Michelle Bowman stressed that lowering inflation remains the central bank’s top priority, while Philadelphia Fed President Anna Paulson said more rate increases lie ahead.
