Gold Surges on Reduced Rate Hike Expectations
Gold prices continued their upward trend on Wednesday, reaching a 10-week high before encountering technical resistance. According to Reuters, spot gold rose 0.9% to $4,404.99 per ounce by 07:13 GMT, while US gold futures for December delivery climbed 0.5% to $4,464.80.
OANDA's senior market analyst Kelvin Wong attributed the increase in gold prices to the easing of expectations for a Federal Reserve interest rate hike. 'The main driver for gold is the easing of expectations for a Federal Reserve interest rate hike,' he said.
The CME Group's FedWatch tool shows that traders now expect a 50% probability of a September rate increase, down from 60% before the jobs report. Lower interest rates typically support gold, which does not offer a yield.