Gold Stuck Below $4,300 as Trump-Xi Summit Looms and Fed Hike Bets Rise
Gold prices continue to trade below $4,300, maintaining a negative bias for the second consecutive day. Traders are awaiting the outcome of a crucial meeting between US President Donald Trump and Chinese counterpart Xi Jinping, with expectations for significant announcements low.
The impending headlines could bring volatility to the market and potentially boost gold prices, but any upward moves are likely to be short-lived due to rising US Federal Reserve (Fed) rate hike bets. According to CME Group's FedWatch Tool, traders now expect a nearly 70% chance of a rate increase in October.
The acceleration of US business activity in September, as indicated by the S&P Global flash Composite PMI Output Index, has lifted expectations for further Fed tightening. This has also pushed up crude oil prices and reignited inflation fears.