Gold rises on softer dollar, easing yields; Fed outlook in focus
Gold prices rose to a one-week high as traders weighed the possibility of further interest rate hikes by the US Federal Reserve. While gold gained 1.3%, market analysts remain cautious about further growth without a significant economic catalyst.
Why it matters
Gold is a primary hedge against inflation and interest rate volatility, making its price movements a key indicator of global economic sentiment.
Gold rose to a one-week high on Friday, while traders assessed the likelihood of further US Federal Reserve interest rate hikes.
Spot gold rose 1.3% to $4,186.04 , heading for a weekly gain of about 1%. The metal fell to a two-month low on Wednesday as a stronger dollar and rising US Treasury yields weighed on the non-yielding metal.
US gold futures for December delivery also added 1.3%, trading at $4,211.20 per ounce.
U.S. 10-year Treasury yields were off over two-decade highs hit on Wednesday.
St. Louis Fed President Alberto Musalem said on Thursday the US central bank will need to hike rates again to bring inflation back to its 2% target.
Traders are pricing in a 19% chance of a rate hike in October and an 84% probability of at least one 25-basis-point increase by December, according to the CME's FedWatch tool.
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