Gold Climbs as Fed Rate Hike Expectations Ease
Gold prices saw a slight increase on Tuesday, buoyed by easing expectations of a Federal Reserve rate hike in October. Spot gold rose 0.7% to $4,168.89 per ounce, while US gold futures for December delivery climbed 1% to $4,196.90. According to Ole Hansen, head of commodity strategy at Saxo Bank, gold remains near key support just above $4,100, facing headwinds from rising real yields and a stronger US dollar.
The US dollar maintained its gains from Monday, making gold more expensive for investors using other currencies. Meanwhile, US 10-year and 30-year Treasury yields hit new 24-year highs. The probability of a Fed rate hike in October dropped to 21%, though traders still see a 70% chance of an increase in December, according to CME’s FedWatch Tool.
Hansen noted that with limited US economic data due this week, market attention will likely stay on the dollar, yields, and political instability in the euro zone. Rising government debt and budget deficits in parts of Europe, particularly France, have also heightened investor concerns.
Other precious metals showed mixed movements. Silver gained 0.6% to $61.4419, while platinum and palladium both fell, with platinum slipping 0.5% to $1,712.01 and palladium dropping 0.7% to $1,164.73.