Gold Advances as Fed Rate Hike Bets Cool Down Ahead of Critical US Inflation Data
Gold prices edged higher during Wednesday's trading session, buoyed by a scaling back of bets that the Federal Reserve will raise interest rates next month. Meanwhile, investors are closely on edge, awaiting the release of key U.S. inflation data that could significantly reshape monetary policy expectations.
Market Movements
The following table summarizes the latest price action in the gold market:
AssetPriceDaily Change
Spot Gold$4,392.40 per ounce+0.59%
US Gold Futures (Dec Delivery)$4,466.70+0.60%
Gold Tests Technical Resistance
On Tuesday, the yellow metal had climbed to a 10-week high before facing stiff technical resistance at the 100-day moving average, which hovered around $4,387. This resistance caused prices to settle lower for only the second time this month.
"The main driver for gold right now is the decline in expectations for a Federal Reserve interest rate hike," said Kelvin Wong, Senior Market Analyst at OANDA.
Rate Hike Bets Retreat
Last Friday, gold recorded its largest weekly gain since January. This rally was triggered by weaker-than-expected U.S. jobs data, which immediately prompted traders to trim their bets on an imminent U.S. interest rate hike.
According to the CME Group's FedWatch Tool, market pricing for monetary policy has shifted notably:
Current Probability: Traders are currently pricing in a 50% chance of a rate hike in September.
Previous Probability: This is down from a 60% probability recorded just before the release of the non-farm payrolls report.