Gold rises but strong Fed hike bets keep it near seven-week low
GLD•Spot gold rose 1.1% to $4,157.39 an ounce on Tuesday but remained near a more-than-seven-week low, as expectations for Federal Reserve rate hikes supported the dollar and Treasury yields. Markets saw a 70% chance of a rate hike in October and 95% in December.
1. Gold rebounds from lows
Spot gold gained 1.1% to $4,157.39 per ounce as of 9:30 a.m. ET on Tuesday, while U.S. gold futures rose 0.5% to $4,189.60. Gold had fallen nearly 4% in the previous session to its lowest level since August 5. Peter Grant of Zaner Metals called Tuesday’s move “just a correction from yesterday’s losses” and said gold faced significant headwinds.
2. Rate bets support dollar
The dollar tested several-month highs, while Treasury yields remained elevated. Markets priced in a 70% probability of a Federal Reserve rate hike in October and a 95% chance of an increase in December. Investors awaited ADP employment and PCE inflation data due Wednesday, followed by nonfarm payrolls on Friday.
3. Other metals decline
Spot silver eased 0.1% to $60.89 an ounce, platinum slipped 1.9% to $1,684.95, and palladium lost 0.3% to $1,210.70.
