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Gold rises above $4,100 as traders scale back September Fed hike odds

Markets are pricing nearly a 63.4% chance of a US rate hike in September, down from about 77% before the July Fed meeting, a shift that lifted demand for non-yielding gold.

Reported · Written up by our desk · Major Pairs

Gold prices moved higher in early Asian trade on Friday, gaining momentum to around $4,110 after holding above $4,100, as traders pared back expectations for a September US rate hike.

FXStreet said the repricing came after Federal Reserve Chair Kevin Warsh gave limited clarity on policy direction, leaving markets confused despite his emphasis on bringing inflation down. The outlet noted that gold, which does not pay interest, can become less attractive when rates are expected to stay high.

The US central bank left interest rates unchanged on Wednesday, keeping them in a 3.50% to 3.75% target range. Still, according to FXStreet, CME FedWatch data showed the probability of a September hike at nearly 63.4%, down from about 77% before the July Fed meeting.

FXStreet added that geopolitical tensions in the Middle East could influence the metal’s outlook, since renewed risk can support oil prices and may encourage central banks to keep rates elevated longer. The story also referenced Bloomberg reporting on statements from Iran’s Islamic Revolutionary Guard Corps about targeting US bases in the region.

Latest closeGold $4,166.30 ▲3.3%

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