Gold Plunges to Two-Week Low as Rate Hike Odds Surge to 66.4%
Gold prices have plummeted to a two-week low as rate hike odds surge. Spot gold cut through support on Tuesday and printed a fresh two-week low at $4,375, trading $4,378 into the European afternoon.
The decline has been swift, with gold giving back 7% of its gain in just four sessions. The cause is a single repricing: CME FedWatch puts a 25 basis point hike at the September 15-16 FOMC meeting at 66.4%, with 33.6% on a hold.
Silver has taken it harder, down 2.69% from Monday's $66.55 and now down 8.90% year to date. The tension in this tape is the whole story, as gold closed August up 9.6%, its best month since January, but also confirmed a bear market during the same stretch.
The Federal Reserve chairman's Jackson Hole address on Friday, August 28, is the single input that turned gold. He put PCE inflation at 3.7% over the past year and 4.1% annualized over the past six months, saying underlying trends have not meaningfully improved.