Gold falls on growing Fed rate hike bets ahead of policy meeting
Traders priced in a 95% chance of a Fed hike as higher oil costs lifted inflation concerns and pushed Treasury yields and the dollar higher.
- On Wednesday, the Federal Reserve raised its benchmark interest rate by 0.25% to a range of 3.75%–4.00%, marking the central bank's first rate hike in three years amid persistent inflation pressures.
- Elevated energy costs, driven by Houthi strikes in the Middle East and supply disruptions, stoked August inflation, with the core consumer price index rising 0.3% and piling pressure on the Fed to tighten policy.
- Traders had largely anticipated the move, pricing in a 93% probability of an increase ahead of the announcement, while the S&P 500 climbed 0.86% as investors processed the latest economic data.
- Fed Chair Kevin Warsh joined the unanimous decision, effectively acknowledging the administration's difficulty controlling inflation despite President Donald Trump's earlier calls to keep borrowing costs lower.
- Gold prices rose on Wednesday as investors looked ahead to future policy signals, though analysts at ING noted the precious metal could remain vulnerable if policymakers signal rates will stay higher for longer.
119 Articles
119 Articles
The future gold contracts closed this Wednesday (16) on high firm, while the market awaits the monetary policy decision of the Federal Reserve (Fed) on the interest rates, whose expectation is high. Relief in oil prices and in the revenues of the securities of the American Treasury (Treasuries) supported the active in the session. At Comex, the metal division of the New York Mercantile Exchange (Nymex), the future gold contracts with delivery fo…
The Fed's First Hike in Three Years: Why the Dollar and Gold Are Rising Together
TODAY’S NUMBERS: 5.00% (US 10-year Treasury yield, first close above that level since 2023) · 99.5 (Dollar Index, its highest in weeks) · $4,300 (Gold, per ounce) Two assets that almost never rally together are rallying together: investors are betting on Fed resolve today while reserve managers hedge against it over the long run
Oil prices have declined today after an unexpected rise in American raw stocks, the dollar has climbed as the stakes have increased to raise US interest rates, and gold prices have stabilized amid investors' expectation of the Federal Reserve's monetary policy decision. Burnt's forward contracts have dropped 93 cents, or 0.86 percent, to $107.82 per barrel, and futures for West ore... have been published via Cedarnews News.
The renewed conflict in the Middle East and expectations about the path of US interest rates are primarily affecting the stock market sentiment. We saw a drop in the leading indices yesterday, followed by a further decline today, while the price of Brent oil is already above $106 per barrel, and the yield on 10-year US government bonds has risen to a peak not seen since 2007, as expectations about a Fed interest rate hike have strengthened. We w…
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