Gold Rises Amid Oil Decline and Fed Rate Hike Expectations

Gold prices rose on September 16 as traders weighed the decline in oil prices against bets of an interest-rate hike by the US Federal Reserve. The Fed's decision is highly anticipated, with a 93% chance of a rate increase.

The modest retreat in oil prices eased some inflationary concerns, but traders are still pricing in a high likelihood of a Fed hike. Higher borrowing costs typically negatively impact gold, as it does not pay interest.

Christopher Wong, a strategist at OCBC Bank, noted that markets already price in the likelihood of a Fed hike, and the main uncertainty lies in what comes after the decision. If the Fed keeps the door open to further tightening, gold may be more vulnerable to price declines.