Gold Prices Rebound Amid Anticipation of Upcoming Economic Data

The price of gold has risen by 1.1% on Tuesday, reaching $4,190.10 per ounce in US gold futures. This follows a sharp sell-off on Monday that saw gold prices drop nearly 4% to as low as $4,110.55 per ounce.

Ricardo Evangelista, Director and CEO of ActivTrades, believes this modest recovery is simply a rebound from yesterday's decline rather than a fundamental shift in sentiment.

The recent weakness in gold prices can be attributed to higher oil prices and the increased probability of further US rate hikes, according to Giovanni Staunovo, analyst at UBS. This backdrop has kept US real yields and the US dollar elevated, making it more expensive for investors to hold non-yielding assets like gold.

Market expectations are already pricing in a 68% probability of a Fed rate rise in October and a 95% chance of an hike in December, according to the CME's FedWatch Tool. The Federal Reserve has also hinted at further interest rate increases, with some policymakers warning that consistent high inflation could make price hikes more acceptable to consumers.