Gold Retreats as Fed Hike Bets Firm - Naga.com
Gold fell on Tuesday after Fed Governor Christopher Waller said he would back a December rate hike even amid softer data and proposed a 50-basis-point move if inflation persists. With markets nearly fully pricing in a chance of a rate hike at the next Fed meeting, the yellow metal could remain exposed to downside pressure. Attention remains on today s US consumer price data as the key catalyst for gauging whether further hikes could materialise. Hotter-than-expected prints would strengthen the case for further tightening and push gold lower, while any dovish numbers could allow the yellow metal to rebound. Energy prices may remain another factor that could possibly influence inflation expectations and the Fed s decision. While lower crude prices amid increased hopes for diplomacy in the Middle East could mitigate inflation concerns, the question now shifts toward whether they can offset the Federal Reserve s hawkish signals. The US dollar was steady, and short-term yields rose, adding to pressure and could keep gold under strain if they receive additional support from prospects of higher interest rates. Frank Walbaum -- Market Analyst at Naga.com
Gold fell on Tuesday after Fed Governor Christopher Waller said he would back a December rate hike even amid softer data and proposed a 50-basis-point move if inflation persists. With markets nearly fully pricing in a chance of a rate hike at the next Fed meeting, the yellow metal could remain exposed to downside pressure. Attention remains on today s US consumer price data as the key catalyst for gauging whether further hikes could materialise. Hotter-than-expected prints would strengthen the case for further tightening and push gold lower, while any dovish numbers could allow the yellow metal to rebound.
Energy prices may remain another factor that could possibly influence inflation expectations and the Fed s decision. While lower crude prices amid increased hopes for diplomacy in the Middle East could mitigate inflation concerns, the question now shifts toward whether they can offset the Federal Reserve s hawkish signals. The US dollar was steady, and short-term yields rose, adding to pressure and could keep gold under strain if they receive additional support from prospects of higher interest rates. Frank Walbaum -- Market Analyst at Naga.com