Gold Set for Weekly Drop
Gold prices recovered above $3,900 per ounce on Friday after declining for three consecutive sessions, but remained on track for a sharp weekly loss as a stronger US dollar and rising Treasury yields reflected growing expectations of more aggressive Federal Reserve rate hikes. The shift in market sentiment followed hotter-than-expected US consumer inflation data and hawkish comments from Fed officials, with some policymakers suggesting that a larger 50-basis-point rate increase may be necessary to contain inflation. Markets are currently pricing in around an 85% probability of a 25 bps rate hike in December, as well as a 15% chance of a larger 50 bps increase. Traders are also increasingly anticipating additional rate hikes next year. Meanwhile, gold faced further downward pressure from recovering oil prices after President Donald Trump stated that the US no longer needs a deal with Iran.
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Gold prices recovered above $3,900 per ounce on Friday after declining for three consecutive sessions, but remained on track for a sharp weekly loss as a stronger US dollar and rising Treasury yields reflected growing expectations of more aggressive Federal Reserve rate hikes. The shift in market sentiment followed hotter-than-expected US consumer inflation data and hawkish comments from Fed officials, with some policymakers suggesting that a larger 50-basis-point rate increase may be necessary to contain inflation. Markets are currently pricing in around an 85% probability of a 25 bps rate hike in December, as well as a 15% chance of a larger 50 bps increase.
Traders are also increasingly anticipating additional rate hikes next year. Meanwhile, gold faced further downward pressure from recovering oil prices after President Donald Trump stated that the US no longer needs a deal with Iran.