Gold steadies as cooler US inflation data counters higher Treasury yields
GLD•Gold was little changed at $4,155.60 an ounce after US inflation rose less than expected in August, while 10-year Treasury yields reached a more than two-decade high. Markets priced in a 37% chance of an October rate hike, down from 45% before the inflation data.
1. Gold holds steady
Spot gold was little changed at $4,155.60 per ounce by 0830 GMT, while US December gold futures held steady at $4,185.50. Gold fell more than 6% in September.
2. Inflation and yields
US inflation rose less than expected in August, and price pressures for the prior month were revised lower. The data reduced market expectations of an October Federal Reserve rate hike; traders priced in a 37% chance, down from 45% before the release, while the perceived chance of a December increase remained 89%. Ten-year Treasury yields reached their highest level in more than two decades, and a stronger dollar limited gold's gains.
3. Payrolls in focus
The September US nonfarm payrolls report, due Friday, and remarks from Fed policymakers were in focus for clues on monetary policy. WisdomTree commodity strategist Nitesh Shah said the inflation data helped dial down some rate-hike expectations and described gold as a possible hedge during bond-market volatility.
