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Gold slips as dollar hits two-month high on more Fed hike bets
XAU/USD was around $4,315, down 1.0% as the dollar index hovered near 100.85 and the market priced roughly a 53% chance of an October hike.
Gold prices fell on Wednesday as expectations for additional Federal Reserve interest rate hikes strengthened the US dollar, a headwind for the non-yielding metal, FXStreet reported. At the time of writing, XAU/USD traded around $4,315, down 1.0% on the day.
The US Dollar Index, which tracks the greenback against a basket of six major currencies, rose to about a two-month high near 100.85. The move came despite a decline in oil prices following positive Middle East developments.
FXStreet said the dollar’s gains followed the Fed’s last week rate increase of 25 basis points to the 3.75% to 4.00% range, alongside signals in updated projections for one more hike this year. Richmond Fed President Thomas Barkin also sounded hawkish, warning that firm economic conditions and risks from tariffs and energy could keep inflation elevated, and the CME FedWatch tool placed the chance of an October hike at around 53%.
With the dollar firmer and Treasury yields elevated, FXStreet noted the 2-year yield was around 4.77%, near 2024 levels, leaving gold vulnerable to further losses. Traders were set to watch preliminary S&P Global Purchasing Managers’ Index data later on Wednesday for clues on economic strength.
Latest closeGold $4,348.00 ▼0.7%|Dollar index 100.87 ▲0.4%