Gold Rebounds as Markets Assess Fed Rate Outlook
Gold prices climbed back above $4,160 an ounce on Tuesday after falling to a more than seven-week low in the previous session, as investors awaited fresh US economic data for clues on the Federal Reserve’s interest-rate outlook. Bullion plunged nearly 4% on Monday as a surge in crude oil prices, driven by lingering concerns over potential disruptions to Middle East supplies, strengthened expectations that the Fed could raise interest rates. Higher oil prices can intensify inflationary pressures, potentially prompting central banks to keep borrowing costs elevated for longer and weighing on non-yielding assets such as gold. Markets are currently pricing in a nearly 70% chance of a Fed rate hike as early as October and a 95% probability of an increase in December, according to the CME FedWatch Tool. Investors are now awaiting key economic indicators, including Wednesday’s ADP employment report and PCE inflation data, as well as remarks from several Federal Reserve policymakers.
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Gold prices climbed back above $4,160 an ounce on Tuesday after falling to a more than seven-week low in the previous session, as investors awaited fresh US economic data for clues on the Federal Reserve’s interest-rate outlook. Bullion plunged nearly 4% on Monday as a surge in crude oil prices, driven by lingering concerns over potential disruptions to Middle East supplies, strengthened expectations that the Fed could raise interest rates. Higher oil prices can intensify inflationary pressures, potentially prompting central banks to keep borrowing costs elevated for longer and weighing on non-yielding assets such as gold.
Markets are currently pricing in a nearly 70% chance of a Fed rate hike as early as October and a 95% probability of an increase in December, according to the CME FedWatch Tool. Investors are now awaiting key economic indicators, including Wednesday’s ADP employment report and PCE inflation data, as well as remarks from several Federal Reserve policymakers.