Dollar Weakness Lifts Gold as Fed Hike Odds Rise
Gold prices have risen over 1% on Wednesday as the US dollar remains under pressure. The greenback hovered near a two-week low, making gold less expensive for holders of other currencies.
David Meger, director of metals trading at High Ridge Futures, noted that there has been some supportive scenario for the gold market due to the dollar's weakness.
The recent oil price surge above $100 per barrel and the ongoing conflict in the Middle East have contributed to the inflationary push, according to Rhona O'Connell, head of market analysis at Stone X. She added that higher bond rates are a result of freight and supply chain disruption, leading to increased monetary policy aimed at containing inflation.
The market is pricing around a 60% chance of an interest rate hike by the Federal Reserve next week, according to the CME FedWatch Tool. Traders await key US inflation data due on Thursday and Friday for clues on whether the Fed will hike interest rates to combat price pressures.