Gold Rebounds on Oil Weakness, Fed Rate Hike Buoys US Dollar
Gold has rebounded to $4,379 as oil prices eased despite a week that featured a rate hike by the Federal Reserve (Fed), which pushed the yellow metal to a nearly two-month low of $4,235. The Fed's decision was driven by concerns about inflation, with Fed Chair Kevin Warsh noting that the economy remains strong and justifying the first rate increase in three years.
The US 10-year Treasury yield is up nearly six basis points to 4.996%, boosted mostly by the Federal Reserve's 0.25% rate hike on Wednesday. The dot plot in the Fed's projection materials showed that most officials expect at least one more rate hike, with a 55% chance of another increase at the October meeting.
The oil price weakness has capped the US Dollar's advance, with the US Dollar Index (DXY) almost flat at 100.29. The relative strength index shows momentum favouring buyers, with Gold facing stiff resistance at $4,400 and retreating after reaching a high of the day of $4,399.