Gold Slightly Up as Fed Rate-Hike Bets Fade
Gold edged above $4,160 an ounce on Tuesday as fading expectations of a Federal Reserve rate hike this month offset pressure from a firm US dollar and elevated Treasury yields. Markets have scaled back bets on an October rate hike following weaker-than-expected job growth in September and downward revisions to payrolls for the previous two months. Traders now see only about a 20% chance of a rate increase this month, while still pricing in nearly a 70% probability of a hike in December, according to the CME FedWatch Tool. Higher interest rates raise the opportunity cost of holding non-yielding gold. The dollar, however, remained close to an 18-month high, supported by rising government debt, widening budget deficits and political uncertainty in parts of the Eurozone, which have weighed on the euro. Meanwhile, oil prices fell on Tuesday as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased concerns over supply disruptions.
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Gold edged above $4,160 an ounce on Tuesday as fading expectations of a Federal Reserve rate hike this month offset pressure from a firm US dollar and elevated Treasury yields. Markets have scaled back bets on an October rate hike following weaker-than-expected job growth in September and downward revisions to payrolls for the previous two months. Traders now see only about a 20% chance of a rate increase this month, while still pricing in nearly a 70% probability of a hike in December, according to the CME FedWatch Tool. Higher interest rates raise the opportunity cost of holding non-yielding gold.
The dollar, however, remained close to an 18-month high, supported by rising government debt, widening budget deficits and political uncertainty in parts of the Eurozone, which have weighed on the euro. Meanwhile, oil prices fell on Tuesday as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased concerns over supply disruptions.