Gold Prices Surge as US Interest Rate Hike Expectations Plunge
Gold prices rose in European trading on Wednesday, extending their recovery for a second consecutive session from an eight-week low. The precious metal gained 0.5% to $4,202.31 an ounce, from the opening level of $4,182.20.
The increase was driven by bargain buying and declines in the US dollar and Treasury yields. Weak US economic data triggered a major shift in expectations for a Federal Reserve interest rate hike in October, with investors now awaiting further key economic releases to reassess those expectations.
US job openings fell to 7.08 million at the end of August from 7.34 million at the end of July, below market expectations of around 7.23 million. The CME FedWatch Tool showed that the probability of the Federal Reserve leaving interest rates unchanged in October rose from 30% to 53%, while the probability of a 25-basis-point rate hike fell from 70% to 47%.