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Gold dips to a one-week low as Fed hike bets and Iran risks lift the dollar
CME FedWatch pricing points to nearly a 70% chance of another Fed rate increase in October, while 10-year Treasury yields hit their highest level since July 2007.
Gold prices slipped to a one-week low in early Asian trading, with the metal struggling to gain follow-through as traders weighed stronger expectations for additional US rate hikes and renewed geopolitical risk tied to Iran.
FXStreet reports that the dollar drew support as rate hike bets strengthened, with CME Group's FedWatch Tool showing traders pricing in nearly a 70% chance the Federal Reserve will raise borrowing costs again in October. The outlook was reinforced by a private survey indicating US business activity accelerated for a fourth straight month in September, with S&P Global's flash Composite PMI Output Index rising from 56.0 in August to 58.4, the highest since July 2021.
Meanwhile, tensions between the United States and Iran featured prominently during the United Nations General Assembly. After comments from President Donald Trump, Iran President Masoud Pezeshkian said Iran would be ready for diplomacy but that any deal would need an end to the US blockade, including targeting Iranian ports and maritime shipping around the Strait of Hormuz, helping push crude oil higher and reviving inflation concerns.
FXStreet also noted that rising 10-year Treasury yields, which were at their highest level since July 2007, further weighed on non-yielding gold. The article cited technical levels, saying weakness below the monthly swing low around $4,235 would be needed to reaffirm the negative outlook.
Latest closeGold $4,323.20 ▼1.2%|WTI crude $91.79 ▼3.0%