1 hr ago
Gold Holds Steady as Oil, Yields Ease Fed Hike Bets
Gold prices stayed nearly the same after rising the day before.
More oil is moving from the Middle East than during the conflict, and oil prices stabilized.
Bond yields also fell, reducing pressure on the US Federal Reserve to raise interest rates soon.
Traders now see a smaller chance of a rate increase at the Fed’s October meeting.
The Fed’s September meeting notes were due out Wednesday and could offer clues about future rates.
Attacks on tankers in the Strait of Hormuz have increased, so risks to oil supplies remain.
Gold has fallen more than a fifth since the US-Iran conflict began in late February.
Central bankers meeting in Italy said gold is increasingly important for diversifying reserves and can appeal as a safe-haven asset during uncertainty.
Gold traded around $4,167 an ounce after gaining 0.6% the previous day.
Oil flows from the Middle East were estimated at about 80% of pre-conflict volumes, according to Shell CEO Wael Sawan.
Treasury yields fell Tuesday as oil stabilized, easing pressure on the Federal Reserve to raise rates this month.
Traders priced in less than a one-in-five chance of an October rate increase, down from about 40% a week earlier.
Gold remains more than 20% below its level before the US-Iran conflict began in late February.
- Who
- Gold traders, the US Federal Reserve, and central bankers meeting in Italy.
- What
- Gold held steady as higher oil supplies and falling bond yields reduced expectations of an imminent US rate hike.
- Where
- Gold was trading in Singapore hours; the article also discusses Middle Eastern oil flows and a central bankers’ gathering in Italy.
- When
- Tuesday and Wednesday, as reported in the article; the October Fed meeting is upcoming.
- Why
- Oil stabilization and lower Treasury yields eased pressure on the Fed to raise interest rates, supporting gold.
Key facts
- Spot gold
- $4,167.05 an ounce at 7:43 a.m. in Singapore
- Previous session
- Gold rose 0.6%
- Middle East oil flows
- About 80% of pre-conflict volumes, according to Shell CEO Wael Sawan
- October rate-hike odds
- Less than one-in-five, down from about 40% a week earlier
- Gold since conflict began
- Down more than a fifth since late February
- Other metals
- Silver was steady at $61.34; platinum and palladium were stable
- Dollar index
- The Bloomberg Dollar Spot Index was flat after falling 0.2% in the previous session
Sources
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