Gold holds steady as investors await Fed policy cues
Gold prices eased as rising crude oil prices fueled inflation concerns, reinforcing expectations of a Federal Reserve rate hike and lifting Treasury yields. Spot gold fell 0.7% to $4,266.49 an ounce, with traders pricing in a 92% chance of a 25-basis-point hike by the Fed this Wednesday.
Why it matters
This reflects the immediate impact of global economic indicators and geopolitical events on commodity markets and central bank policy, affecting investor strategies and the broader economy.
Gold prices eased on Tuesday as a rally in crude underscored inflation risks, reinforcing expectations of a Federal Reserve rate hike and lifting Treasury yields ahead of the central bank's policy meeting this week.
Spot gold was down 0.7% at $4,266.49 an ounce after hitting its lowest point since August 7 on Monday. U.S. gold futures fell 1% to $4,307.40.
"The pressure on gold reflects a combination of rising oil prices, a U.S. rate hike on Wednesday being almost fully priced in, a stronger dollar and, not least, long-end bond yields reaching higher levels," said Ole Hansen, head of commodity strategy at Saxo Bank.
"A move back above $4,440 would, in our opinion, be needed to ease the current downside pressure."
The U.S. central bank will announce its policy decision at 1800 GMT on Wednesday.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in