Gold ticks up as softer Fed rate expectations offset higher yields
GLD•Spot gold rose 0.3% to $4,152.04 per ounce as reduced expectations of an October Fed rate hike offset a firm dollar and elevated Treasury yields. Traders priced a 21% chance of an October increase and nearly 70% for December.
1. Gold edges higher
Spot gold rose 0.3% to $4,152.04 per ounce by 0909 GMT, while U.S. December gold futures gained 0.56% to $4,180.00. A firm U.S. dollar and elevated Treasury yields continued to weigh on investor appetite, according to Saxo Bank commodity strategy head Ole Hansen.
2. Rate expectations shift
Markets pared bets on an October rate increase after September job growth came in softer than expected and payrolls for the previous two months were revised down. Traders saw a 21% chance of an October increase and nearly 70% probability of a December increase, CME's FedWatch Tool showed. Higher rates increase the opportunity cost of holding non-yielding gold.
3. Other metals and oil
Oil prices fell as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased supply concerns. Silver was flat at $61.10 per ounce, platinum fell 0.6% to $1,710.71 and palladium declined 1% to $1,160.66.
