Gold Rises as Markets Reassess Fed Rate Outlook
Gold prices gained momentum on Thursday, trading around $4,175 an ounce, after softer-than-expected US inflation data eased expectations of a Federal Reserve rate hike in October, although higher Treasury yields and a stronger dollar limited gains. US inflation rose less than expected in August, while price pressures for the previous month were revised lower. The data reduced the odds of a rate hike in October, with markets pricing in less than a 40% chance, while still seeing nearly a 90% probability of an increase in December. 10-year Treasury yields climbed to their highest level since 2002, raising the opportunity cost of holding non-yielding gold, while a firmer dollar also weighed on the metal. Attention now turns to Friday’s September nonfarm payrolls report, expected to show a net gain of around 90,000 jobs, as well as comments from Fed policymakers. Meanwhile, US-Iran negotiations over reopening the Strait of Hormuz and ending the Middle East conflict remain stalled.
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Gold prices gained momentum on Thursday, trading around $4,175 an ounce, after softer-than-expected US inflation data eased expectations of a Federal Reserve rate hike in October, although higher Treasury yields and a stronger dollar limited gains. US inflation rose less than expected in August, while price pressures for the previous month were revised lower. The data reduced the odds of a rate hike in October, with markets pricing in less than a 40% chance, while still seeing nearly a 90% probability of an increase in December.
10-year Treasury yields climbed to their highest level since 2002, raising the opportunity cost of holding non-yielding gold, while a firmer dollar also weighed on the metal. Attention now turns to Friday’s September nonfarm payrolls report, expected to show a net gain of around 90,000 jobs, as well as comments from Fed policymakers. Meanwhile, US-Iran negotiations over reopening the Strait of Hormuz and ending the Middle East conflict remain stalled.