Fed Rate Hike Odds Hit 60%, Sending Gold and Bitcoin Prices into Free Fall
The rally in gold and Bitcoin has been halted as investors adjust to a higher probability of a U.S. Federal Reserve rate hike.
The recent release of August labor market figures showed that the U.S. economy added 162,000 jobs, exceeding expectations and indicating economic resilience.
This stronger-than-anticipated growth has increased the likelihood of an interest rate increase, with the CME FedWatch tool now showing a 60% probability of a hike during the upcoming September 16 policy meeting.
The market reaction was immediate, with gold spot prices falling by 2.4% and Bitcoin dropping below $80,000.
Investors are now recalibrating their expectations based on the connection between interest rates and these assets, which do not pay regular interest or dividends.