Gold Falls to Seven-Week Low Amid Rising Rate Hike Expectations
Gold prices have fallen to a seven-week low as expectations of another Federal Reserve rate hike in October rise above 70%. The current probability of a 0.25% hike is estimated at 72.5%, up from last week's 57.6%. This increase in rate hike expectations has contributed to the decline in gold prices, which are currently trading near $4,143 per ounce.
The stronger U.S. dollar, increasing Treasury yields, and higher crude oil prices have also weighed on bullion. However, some analysts believe that gold may experience a short-term bounce due to its oversold condition. The key support levels for gold are at $4,185 and $4,123, while the resistance levels are at $4,227 and $4,246.
Upcoming economic data releases this week could significantly influence gold prices. Softer U.S. labor or inflation data could reduce October hike expectations and pressure both yields and the dollar, potentially leading to a recovery in gold prices. However, if the data supports a more dovish Fed, gold may appreciate further.