Gold Holds Decline on Rate Hike Bets
Gold remained below $4,300 an ounce on Tuesday, hovering near five-week lows as elevated oil prices strengthened expectations for a US Federal Reserve interest rate hike this week. Oil prices extended their gains as Saudi Arabia’s East-West pipeline remained shut, while Ukraine disputed President Trump’s claim that it had already reached an agreement with Russia to halt attacks on energy infrastructure. Rising energy prices fueled inflation concerns and increased pressure on the Fed to tighten policy, with markets currently pricing in roughly a 92% chance of a 25-basis-point rate hike on Wednesday. The US 10-year Treasury yield also climbed toward 5% amid inflation and fiscal concerns, adding further pressure on non-yielding bullion. Elsewhere, the Bank of Japan is also expected to raise rates on Friday, as elevated energy costs and ongoing tensions in the Middle East continue to complicate the inflation outlook.
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Gold remained below $4,300 an ounce on Tuesday, hovering near five-week lows as elevated oil prices strengthened expectations for a US Federal Reserve interest rate hike this week. Oil prices extended their gains as Saudi Arabia’s East-West pipeline remained shut, while Ukraine disputed President Trump’s claim that it had already reached an agreement with Russia to halt attacks on energy infrastructure. Rising energy prices fueled inflation concerns and increased pressure on the Fed to tighten policy, with markets currently pricing in roughly a 92% chance of a 25-basis-point rate hike on Wednesday.
The US 10-year Treasury yield also climbed toward 5% amid inflation and fiscal concerns, adding further pressure on non-yielding bullion. Elsewhere, the Bank of Japan is also expected to raise rates on Friday, as elevated energy costs and ongoing tensions in the Middle East continue to complicate the inflation outlook.