Gold Stabilizes as Traders Reassess Fed Hike Chances

Gold prices remain stable on Wednesday, consolidating gains from the previous day after recovering from a seven-week low. The US Dollar and Treasury yields have retreated as traders trim bets on another Federal Reserve interest-rate hike in October following less hawkish remarks from New York Fed President John Williams.

'With the policy action we took at our September meeting, there is no need for urgency,' Williams said. 'If the economy evolves in a manner broadly consistent with my forecast, one further upward adjustment of the federal funds target range may be appropriate late this year to support a timelier return of inflation to target.'

Markets now see a 43% chance of an October rate hike, down from around 70% earlier this week. The core PCE Price Index is expected to rise 0.3% MoM in August, while headline PCE inflation is forecast to rise 0.4% MoM.

The report will be closely watched for fresh clues about the Fed's next policy move. A stronger-than-expected reading could revive expectations of an October rate hike, lifting the US Dollar and Treasury yields while putting renewed pressure on Gold.