Gold Bounces Back Amid Falling Oil Prices and Rate Hike Expectations
The US Federal Reserve's rate hike expectations continue to weigh on gold markets. According to the FedWatch Tool, the probability of a rate hike at next week's meeting has increased to 86.7%, indicating that traders are almost certain of a federal funds rate increase.
The yield of 2-year Treasuries climbed above 4.62% as bond traders focused on inflation data, while the yield of 10-year Treasuries pulled back towards 4.95% after failing to break through the psychologically important 5.00% level.
Gold prices rebounded today, however, following a 4% decline in oil markets due to the planned meeting between Gulf countries and Iran to discuss the future of the Strait of Hormuz.
The support at $4300-$4320 held strong, and gold prices rose above $4350. If gold settles above $4400, it will target the resistance in the $4480-$4500 range.