Gold Prices Steady Near $4,450 Amid Fed Rate-Hike Fears
Gold prices have stabilized near $4,450 as investors remain cautious due to Federal Reserve rate-hike expectations. The precious metal had fallen to its lowest level since August 19 but has steadied after reaching a more than three-month high of $4,697 last week.
The Fed's hawkish stance, led by Chairman Kevin Warsh, has revived expectations that interest rates could rise as soon as September. This has pushed the US Dollar and short-term US Treasury yields higher, making gold less attractive as it offers no yield.
Despite a modest pullback in the US Dollar and Treasury yields on Monday, gold's recovery is still hindered by the prospect of higher interest rates. Analysts at Rabobank note that Warsh emphasized the need for underlying inflation to improve convincingly before considering rate hikes.