Gold Slumps to Seven-Week Low Amid Rate Hike Pressure
Gold prices have taken a hit, trading near seven-week lows due to mounting pressure from rate hikes. According to Free Malaysia Today, gold is down around 7% in September after the Federal Reserve's first rate hike since 2023 aimed at tackling sticky US inflation.
The bullion traded around $4,120 an ounce in early Asian trade on Wednesday, after tumbling 4% on Monday to a seven-week low. Oil extended gains as Iranian officials privately expressed pessimism about reaching a deal with Washington before the US midterm elections in November.
Analysts from China Zheshang Bank Co Ltd noted that 'a lot of trading volume accumulated near September's highs, so further upside faces significant pressure in the short term.' They also added that 'a return to long-term 'dollar debasement' theme will need a fresh macro catalyst.'
Fed governor Lisa Cook warned that future productivity gains from artificial intelligence may not be enough to offset near-term price pressures. This could drive up inflation across the economy, and markets are watching for personal consumption expenditure data on Wednesday and non-farm payrolls data on Friday for clues on the path for rates.