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Gold slips as Fed hike bets and oil rally lift US yields

Gold is down about 0.4% on the day, while WTI crude rose 2.5% to $85.62, pushing the US 10-year Treasury yield higher.

Reported · Written up by our desk · Major Pairs

Gold prices retreated about 0.4% on Monday, as renewed Federal Reserve tightening speculation following hawkish remarks from Fed Chair Kevin Warsh weighed on the metal. Still, the commodity was positioned to end the month higher, with XAU/USD around $4,432 after a daily high near $4,472, according to FXStreet.

FXStreet said the broader driver for higher yields was a shift in rate expectations tied to both the Fed commentary and energy prices. The outlet pointed to US and Iran exchanging strikes, which lifted oil, with West Texas Intermediate rising 2.5% to $85.62, a backdrop that can raise the odds of higher interest rates.

On the rates side, FXStreet noted the US 10-year Treasury yield was up about 2.5 basis points to 4.706%. The US Dollar Index (DXY) fell roughly 0.25% to 99.42, while money markets have priced in at least 26 basis points of tightening toward year end, and odds for the September 16 meeting stood at 64% for a hike versus 36% for no change at 3.50% to 3.75%.

Looking ahead, FXStreet said upcoming US data releases including ISM Manufacturing and Services PMIs, JOLTS Job Openings, Initial Jobless Claims, and Nonfarm Payrolls could move markets, with gold currently trading between its 100-day and 200-day simple moving averages near $4,370 and $4,528 as a doji forms on the daily chart.

Latest closeGold $4,504.10 ▼2.3%|Dollar index 99.68 ▲0.5%

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