Gold Prices Rise but Fall for Week Amid Expectations of Another Fed Rate Hike

Gold prices rose on Friday but still fell for the week due to expectations of another interest rate hike by the Federal Reserve. The Fed raised rates by a quarter-point last week, its first increase in three years, and traders are now pricing in a 66% chance of an October hike and a 93% chance of an increase in December.

The surge in Treasury yields, which reached multiyear highs this week, also weighed on gold. The two-year, 10-year, and 20-year yields rose sharply to end at 4.862%, 5.180%, and 5.500%, respectively.

Saxo Bank analysts said that investment metals faced a 'bond-market stress test' due to the rising Treasury yields, which supported a stronger dollar and increased the opportunity cost of holding non-yielding assets like gold.