Gold Slips as Oil Rally Fans Rate Hike Bets Ahead of Fed Meeting
Traders priced an 86.5% chance of a U.S. rate hike as oil jumped more than 2%, pressuring bullion, the CME FedWatch Tool said.
- Gold prices eased on Monday as a surge in oil prices stoked inflation concerns, boosting expectations that the Federal Reserve may raise interest rates at its policy meeting this week.
- Fresh Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf drove oil prices up more than 2% on Monday, compounding supply concerns after a key Saudi pipeline closure.
- Traders are pricing in an 86.5 percent probability of a Federal Reserve rate hike at its policy meeting on Tuesday and Wednesday, up from about 67 percent before last week's inflation data, according to the CME FedWatch Tool.
- The BOJ is also widely expected to raise rates on Friday, as persistent inflation and resilient economic growth have raised the prospect of further rate hikes by major central banks amid rising energy prices.
- Rising energy prices plus climbing rate expectations are delivering a yield headwind for gold, though Tim Waterer, chief market analyst at KCM Trade, said "dips should still find buyers as an uncertainty hedge while geopolitics and rate policy remain fluid.
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Gold declined with rising oil prices and renewed inflation concerns, while prospects for raising US interest this week increased to 86%, although Goldman Sachs continued to expect metal to reach $4,900.
Gold slips as oil rally fans rate hike bets ahead of Fed meeting
The stock markets remain chained to the rising oil price: the escalation in Saudi Arabia fuels the fears of an increase in inflation. Investors are eagerly looking at the US Federal Reserve's interest rate decision.
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برس بيGold prices edged lower on Monday as rising oil prices exacerbated inflation concerns and bolstered expectations that the Federal Reserve might raise interest rates at its policy meeting this week. Spot gold was down 0.5 percent at $4,327.80 per ounce by 0119 GMT, after posting its third straight weekly decline on Friday. U.S. gold futures for December delivery fell nearly 1 percent to $4,368.60. Among other precious metals, spot silver fell 1.1…
Gold prices fell as rising oil prices heightened inflation concerns and expectations strengthened that the Fed may raise interest rates at its meeting this week.
Gold markets started the new week with a sell-off. Following Friday's rise, gram gold lost value on the first trading day of the week, trading at 6,765 Turkish Lira, while quarter gold was selling for 11,099 Turkish Lira.
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